Document:

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                                                                    EXHIBIT 10.4

                              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 JENNIFER SALSBURY ("Salsbury"). The Company and
Salsbury are collectively referred to in this Agreement as the "Parties."

                                   Background

The Company wishes to employ Salsbury as its Executive Vice President--Secondary
Marketing, and the Parties desire to provide for the employment of Salsbury 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 Salsbury to devote her personal services to
the business and affairs of the Company, and Salsbury accepts such employment,
on the terms and conditions stated in this Agreement.

   1.1. Duties. Salsbury's title and position shall be Executive Vice
   President--Secondary Marketing of the Company. Salsbury'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--Secondary Marketing. Salsbury shall report directly
   to the Company's President. Salsbury 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. Salsbury shall devote her full time (except for
   reasonable vacation time and absence for any disability), attention, and best
   efforts to the performance of her duties described in Article 1.1.

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

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

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   3.1. Base Salary. The Company shall pay Salsbury during the Term a base
   salary equal to One Hundred Forty-Four Thousand Dollars ($144,000.00) 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
   Salsbury 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
   Salsbury 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. Incentive Bonus. The Company shall also pay Salsbury a sum equal to 1.5
   basis points of the net gain on the loans that are sold by StarNet Mortgage
   each month. This sum will be determined on a monthly basis and the bonus
   amount paid, in arrears, on the 15th of each month.

   3.3. Option. Salsbury 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 Salsbury 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.

   3.4. Savings and Retirement Plans. Salsbury 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.

   3.5. Welfare Benefit Plans. Salsbury 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.

   3.6. Paid Time Off. Salsbury 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 Salsbury 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 Salsbury is so employed.

   3.7. Transportation Allowance. During the Term, the Company shall pay
   Salsbury a transportation allowance equal to Five Hundred Dollars ($500.00)
   per month

EMPLOYMENT AGREEMENT -
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   ("Transportation Allowance"). The Transportation Allowance shall be payable
   in equal installments together with the payments of Base Salary.

   3.8. Tax Withholding. The Company may deduct from any compensation or other
   amount payable to Salsbury under this Agreement (including under Article 5)
   social security (FICA) taxes and all federal, state, municipal, and other
   taxes or governmental charges as may, in the Company's judgment, be required.

   3.9. Participation in Compensation and Benefit Plans. Salsbury's
   participation during the Term in any or all of the plans or programs adopted
   by the Company described in Articles 3.3 through 3.6 ("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 Salsbury 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 Salsbury, and Salsbury 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, Salsbury may incur, and shall be
reimbursed by the Company for, reasonable, ordinary and necessary, and
documented business expenses to the extent that Salsbury complies with, and
reimbursement is permitted by, the Company's policies, practices, and
procedures.

5. EMPLOYMENT TERMINATION. Either Party may terminate Salsbury'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
Salsbury's employment under this Agreement are as follows:

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

        5.1.a. Any amount of Base Salary and Transportation Allowance earned by,
        but not yet paid to, Salsbury 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, Salsbury under, and subject to the terms (including all
        eligibility requirements) of,

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        the Compensation and Benefit Plans in which Salsbury participated
        through the Termination Date;

        5.1.c. All reimbursable expenses due, but not yet paid, to Salsbury 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 Salsbury; 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 Salsbury 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 Salsbury's employment, Salsbury 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 Salsbury
   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 Salsbury'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 Salsbury's permanent and total
   disability, which shall be deemed to exist if she is unable reasonably to
   perform her 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. Salsbury shall, if there is any question about her
   Disability, submit to a physical examination by a qualified physician
   selected by the Board or its Representative.

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   In this Agreement, "Cause" means any of the following: (i) Salsbury's failure
   to substantially perform her duties under this Agreement, other than any such
   failure resulting from her incapacity due to physical or mental illness or
   Disability; (ii) Salsbury'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) Salsbury's performance of any
   act or omission constituting dishonesty that results, directly or indirectly,
   in significant gain or enrichment of Salsbury or her family or affiliates at
   the expense of the Company; or (iv) any breach by Salsbury 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 Salsbury
   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, Salsbury 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 Salsbury'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 Salsbury of that
   belief, and that notice shall constitute immediate termination of Salsbury's
   employment.

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

   5.2. Termination Without Cause or Upon Death or Disability. If Salsbury's
   employment is terminated by death or by the Company because of Disability or
   without Cause, Salsbury (or her 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, for twelve (12) consecutive months following the
        Termination Date (the "Severance Payments"); and

        5.2.b. If Salsbury 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 Salsbury for coverage under COBRA for herself and her
        dependents (if any) and (ii) the premiums that

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        she would have paid for comparable coverage under the Company's then
        current group insurance plan or plans if her employment under this
        Agreement had not ceased (the "Insurance Payments"); except that the
        Insurance Payments shall expire or terminate immediately upon Salsbury's
        becoming eligible for coverage under another employer's plan or policy.

   The Severance Payments shall be paid at the dates on which Salsbury's Base
   Salary would have been payable if her 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 Salsbury (or her 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 Salsbury under
   COBRA. The Severance Payments and the Insurance Payments shall be in addition
   to the amounts or benefits to which Salsbury 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 Salsbury'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 Salsbury (including by
   self-employment), and Salsbury shall have no duty to mitigate her 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 Salsbury (or her 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 Salsbury (or her 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 Salsbury (or her 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 Salsbury. If Salsbury's employment is
   terminated by the Company for Cause or is voluntarily terminated by Salsbury,
   then Salsbury shall not

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   be entitled to any payments under this Agreement other than the amounts or
   benefits to which she is entitled under Article 5.1.

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

6. CONFIDENTIAL INFORMATION. The Company shall provide to Salsbury, 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. Salsbury 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 her duties under this
Agreement or otherwise with the Company's prior written consent. Nothing in this
Article 6 shall preclude Salsbury 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
Salsbury 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 Salsbury or otherwise coming into her 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 Salsbury's performance of duties under this Agreement, and (in any event)
shall be promptly returned or delivered to the Company (without Salsbury's
retaining any copies) upon the termination of employment under this Agreement.

7. NONCOMPETITION. Salsbury acknowledges that, in addition to her access to and
possession of Confidential Information, during the Term she will acquire
valuable experience and special training regarding the Company's business and
that the knowledge, experience, and training she will acquire would enable her
to injure the Company if she were to engage in any business that is competitive
with the business of the Company. Therefore, Salsbury shall not, at any time
during the Term and for the twenty-four (24) 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,

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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 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
Salsbury's 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. (Salsbury 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.) Salsbury represents and agrees that (x) the Company has agreed to
provide her, and she 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 Salsbury and that, in order to induce the Company to enter into this
Agreement (which contains various benefits to Salsbury and obligations of the
Company with respect to Salsbury's employment), Salsbury 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. Salsbury shall not, at any time within the twenty-four (24)
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

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        time within the six (6) consecutive months preceding, and including, the
        Termination Date.

9. DEVELOPMENTS. Salsbury 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 Salsbury, by herself 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, Salsbury'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").

Salsbury 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 her right and title to and interest in all Developments. Salsbury 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 Salsbury for
all reasonable expenses incurred by her in complying with this Article 9.

10. INDEMNIFICATION. To the extent Salsbury is an officer or director of the
Company, the Company shall include Salsbury 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 Salsbury 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 Salsbury.

11. CERTAIN REMEDIES. Any breach or violation by Salsbury 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 Salsbury'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 Salsbury against the Company, or any subsidiary or affiliate of the
Company, whether based on this Agreement or

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otherwise, shall not constitute a defense to the enforcement by the Company of
Salsbury'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
Salsbury's employment under this Agreement.

12. BINDING AGREEMENT; SUCCESSORS AND ASSIGNS. This Agreement shall be binding
upon, and shall inure to the benefit of, the Company and Salsbury 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 Salsbury, to assign its rights, benefits, remedies, and obligations
under this Agreement to one or more other persons. The rights, benefits,
remedies, and obligations of Salsbury under this Agreement are personal to
Salsbury, however, and may not be assigned or delegated by her; except that this
shall not preclude (i) Salsbury from designating one or more beneficiaries to
receive any amount or benefit that may be paid or provided after Salsbury's
death or (ii) the legal representative of Salsbury's estate from assigning any
right or benefit under this Agreement to the person or persons entitled thereto
under Salsbury's will or the laws of intestacy applicable to Salsbury'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.

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JENNIFER SALSBURY
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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 Salsbury:                    Jennifer Salsbury

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

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

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 Salsbury for employment or compensation for that period.

EMPLOYMENT AGREEMENT -
JENNIFER SALSBURY
                                       11

<PAGE>   12

16. ENTIRE AGREEMENT. This Agreement, with Exhibit "A", constitutes the entire
agreement between the Company and Salsbury with respect to the subject matter
hereof and supersedes any prior agreement between the Company and Salsbury 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 -
JENNIFER SALSBURY
                                       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/ Jennifer Salsbury
                                         ---------------------------------------
                                         JENNIFER SALSBURY

EMPLOYMENT AGREEMENT -
JENNIFER SALSBURY
                                       13<PAGE>   1
                                                                    EXHIBIT 10.5

                            STARNET FINANCIAL, INC.
                             1999 STOCK OPTION PLAN

        On October 4, 1999, the Board of Directors of StarNet Financial, Inc.
adopted the following 1999 Stock Option Plan:

        1. PURPOSE. The purpose of the Plan is to provide Key Employees,
non-employee directors, independent contractors and consultants with a
proprietary interest in the Company through the granting of Options which will:

        (a) increase the interest of the Key Employees, non-employee directors,
independent contractors and consultants in the Company's welfare;

        (b) furnish an incentive to the Key Employees, non-employee directors,
independent contractors and consultants to continue their services for the
Company; and

        (c) provide a means through which the Company may attract able persons
to enter its employ, serve on its Board and render services to it.

        2. ADMINISTRATION. The Plan will be administered by the Committee.

        3. PARTICIPANTS. The Committee may, from time to time, select the
particular Key Employees, non-employee directors, independent contractors and
consultants of the Company and its Subsidiaries to whom Options are to be
granted, and who will, upon such grant, become Participants in the Plan. The
Committee has the authority, in its complete discretion, to grant Options to
Participants. A Participant may be granted more than one Option under the Plan,
and Options may be granted at any time or times during the term of the Plan.

<PAGE>   2

        4. STOCK OWNERSHIP LIMITATION. No Incentive Option may be granted to an
Employee who owns more than 10% of the voting power of all classes of stock of
the Company or its Parent or Subsidiaries. This limitation will not apply if the
Option price is at least 110% of the fair market value of the Common Stock at
the time the Incentive Option is granted and the Incentive Option is not
exercisable more than five years from the date it is granted.

        5. SHARES SUBJECT TO PLAN. The Committee may not grant Options under the
Plan for more than 5,000,000 shares of Common Stock and may not grant Options to
any Participant for more than 5,000,000 shares of Common Stock, but these
numbers may be adjusted to reflect, if deemed appropriate by the Committee, any
stock dividend, stock split, share combination, recapitalization or the like of
or by the Company. Shares to be optioned and sold may be made available from
either authorized but unissued Common Stock or Common Stock held by the Company
in its treasury. Shares that by reason of the expiration of an Option or
otherwise are no longer subject to purchase pursuant to an Option granted under
the Plan may be re-offered under the Plan.

        6. LIMITATION ON AMOUNT. The aggregate fair market value (determined at
the date of grant) of the shares of Common Stock which any Key Employee is first
eligible to purchase in any calendar year by exercise of Incentive Options
granted under the Plan and all incentive stock option plans (within the meaning
of Section 422 of the Code) of the Company or its Parent or Subsidiaries shall
not exceed $100,000. For this purpose, the fair market value (determined at the
date of grant of each option) of the stock purchasable by exercise of an
Incentive Option (or an installment thereof) shall be counted against the
$100,000 annual limitation for a Key Employee only for the calendar year such
stock is first purchasable under the terms of the Incentive Option.

                                       -2-

<PAGE>   3

        7. ALLOTMENT OF SHARES. The Committee shall determine the number of
shares of Common Stock to be offered from time to time by grant of Options to
Key Employees, non-employee directors, independent contractors and consultants
of the Company or its Subsidiaries. The grant of an Option to an individual
shall not be deemed either to entitle the individual to, or to disqualify the
individual from, participation in any other grant of Options under the Plan.

        8. GRANT OF OPTIONS. The Committee is authorized to grant Incentive
Options, Nonqualified Options, or a combination of both, under the Plan;
provided, however, Incentive Options may be granted only to Key Employees. The
grant of Options shall be evidenced by Option Agreements containing such terms
and provisions as are approved by the Committee, but not inconsistent with the
Plan, including (without limitation) provisions that may be necessary to assure
that any Option that is intended to be an Incentive Option will comply with
Section 422 of the Code. The Company shall execute Option Agreements upon
instructions from the Committee. Except as provided otherwise in Sections 5 and
14 of the Plan, the terms of any Option Agreement executed by the Company shall
not be amended, modified or changed without the written consent of the Company
and the Participant.

        An Option Agreement may provide that the Participant may request
approval from the Committee to exercise an Option or a portion thereof by
tendering Qualifying Shares at the fair market value per share on the date of
exercise in lieu of cash payment of the Option price.

        The Plan shall be submitted to the Company's shareholders for approval.
Options may be granted under the Plan before the shareholders of the Company
approve the Plan, and those Options will be effective when granted; but if for
any reason the shareholders of the Company do not approve the plan before one
year from the date of adoption of the Plan by the Board (the "Shareholder

                                       -3-

<PAGE>   4

Approval Deadline"), all Incentive Options granted under the Plan before the
Shareholder Approval Deadline will be deemed to have been granted as
Nonqualified Options. No Option granted before shareholder approval may be
exercised, in whole or in part, before approval of the Plan by the shareholders
of the Company.

        9. OPTION PRICE. The Option price for an Incentive Option shall not be
less than 100% of the fair market value per share of the Common Stock (or 110%
of such amount as required by Section 4 of the Plan), and at least the par value
per share of Common Stock, on the date the Option is granted. The Option price
for a Nonqualified Option shall be, as determined by the Committee, any price
per share of the Common Stock that is greater than par value per share of the
Common Stock. For purposes of the Plan, the fair market value of a share of the
Common Stock shall be (i) if the Common Stock is traded in the over-the-counter
market or on any securities exchange, the closing price or, if applicable, the
average of the closing bid and ask prices per share of such Common Stock for the
last business day immediately before the date the Option is granted, and (ii) if
the Common Stock is not so traded, an amount determined by the Committee in good
faith using any reasonable valuation method and based on such factors as it
deems relevant to such determination.

        10. OPTION PERIOD. The Option Period will begin on the date the Option
is granted, which will be the date the Committee authorizes the Option unless
the Committee specifies a later date. No Option may terminate later than ten
years (or five years as required by Section 4 of the Plan) from the date the
Option is granted. The Committee may provide for the exercise of Options in
installments and, subject to the provisions hereof, upon such terms, conditions
and restrictions as it may determine. The Committee may provide for termination
of the Option in the case of

                                       -4-

<PAGE>   5

termination of employment, directorship or independent contractor or consultant
relationship, or any other reason.

        11. RIGHTS IN EVENT OF DEATH OR DISABILITY. If a Participant dies or
becomes disabled (within the meaning of Section 22(e)(3) of the Code) prior to
termination of his right to exercise an Option in accordance with the provisions
of his Option Agreement, the Option Agreement may provide that it may be
exercised, to the extent of the shares with respect to which the Option could
have been exercised by the Participant on the date of his death or disability,
(i) in the case of death, by the Participant's estate or by the person who
acquired the right to exercise the Option by bequest or inheritance or by reason
of the death of the Participant, or (ii) in the case of disability, by the
Participant or his personal representative, provided the Option is exercised
prior to the date of its expiration or not more than one year from the date of
the Participant's death or disability, whichever first occurs. The date of
disability of a Participant shall be determined by the Committee.

        12. PAYMENT. Full payment for shares purchased upon exercising an Option
shall be made in cash or by check or, if the Option Agreement so permits and no
legal or regulatory requirement imposed on the Company or covenant made by the
Company is violated, by tendering Qualifying Shares at the fair market value per
share at the time of exercise, or on such other terms as are set forth in the
applicable Option Agreement. If the Common Stock is traded in the over-the-
counter market or upon any securities exchange, the Committee may permit a
Participant exercising an Option to simultaneously exercise the Option and sell
a portion of the shares acquired, pursuant to a brokerage or similar arrangement
approved in advance by the Committee, and use the proceeds from the sale as
payment of the Option price of the Common Stock being acquired by exercise of

                                       -5-

<PAGE>   6

the Option. In addition, the Participant shall tender payment of the amount as
may be requested by the Company, if any, for the purpose of satisfying its
statutory liability to withhold federal, state or local income or other taxes
incurred by reason of the exercise of an Option. No shares may be issued until
full payment of the purchase price therefor has been made, and a Participant
will have none of the rights of a shareholder with respect to those shares until
those shares are issued to him.

        13. EXERCISE OF OPTION. Options granted under the Plan may be exercised
during the Option Period, at such times, in such amounts, in accordance with
such terms and subject to such restrictions as are set forth in the applicable
Option Agreements. In no event may an Option be exercised or shares be issued
pursuant to an Option if any requisite action, approval or consent of any
governmental authority of any kind having jurisdiction over the exercise of
Options shall not have been taken or secured.

        14. CAPITAL ADJUSTMENTS AND REORGANIZATIONS.

            (a) The number of shares of Common Stock covered by each outstanding
Option granted under the Plan and the Option price may be adjusted to reflect,
as deemed appropriate by the Board, any stock dividend, stock split, share
combination, exchange of shares, recapitalization, merger, consolidation,
separation, reorganization, liquidation or the like of or by the Company that is
effected without receipt of consideration by the Company. For this purpose, the
term "effected without receipt of consideration" shall not include conversion or
exchange of any convertible or exchangeable securities of the Company.

            (b) In the event of the proposed dissolution or liquidation of the
Company, the Board shall notify the Participant at least 20 days prior to such
proposed action. To the extent that

                                       -6-

<PAGE>   7

an Option has not been previously exercised, such Option shall terminate
immediately before consummation of such proposed dissolution or liquidation.

            (c) If (i) the Company shall sell all or substantially all of its
assets to an entity that is not an "affiliate," as defined in Rule 405
promulgated under the Securities Act of 1933, as amended, of the Company
immediately before that sale, (ii) the Company consummates a merger,
consolidation, share exchange, or reorganization with another corporation or
other entity and, as a result of such merger, consolidation, share exchange, or
reorganization, less than a majority of the combined voting power of the
outstanding securities of the surviving entity (whether the Company or another
entity) immediately after such transaction is held in the aggregate by the
holders of securities of the Company that were entitled to vote generally in the
election of directors of the Company (or its successor) ("Voting Stock")
immediately before such transaction, or (iii) when the Common Stock is traded in
the over-the-counter market or on any securities exchange, pursuant to a tender
offer or exchange offer for securities of the Company, or in any other manner,
any person or group within the meaning of the Securities Exchange Act of 1934,
as amended (excluding any employee benefit plan, or related trust, sponsored or
maintained by the Company or any of its affiliates), acquires beneficial
ownership (within the meaning of Rule 13d-3 promulgated under the Securities
Exchange Act of 1934, as amended) of more than 50% of the Voting Stock (the
surviving corporation or purchaser described in this paragraph, the "Purchaser,"
and any such event described in this paragraph, a "Change of Control"), then the
Company shall negotiate in good faith to reach an agreement with the Purchaser
that the Purchaser will either assume the obligations of the Company under the
outstanding Options or convert the outstanding Options into options of at least
equal value as to capital stock of the Purchaser; but if such an agreement is
not reached, then the

                                       -7-

<PAGE>   8

Options shall become fully vested and exercisable and the Company shall notify
each Participant, not later than 20 days before the effective date of such
Change of Control (except that in the case of a Change of Control under clause
(iii), notice shall be given as soon as practicable after the Change of
Control), that his Option has become fully vested and exercisable, whether or
not such Option shall then be exercisable under the terms of his Option
Agreement. Any such arrangement relating to Incentive Options shall comply with
the requirements of Section 422 of the Code and the regulations thereunder. To
the extent that the Participants exercise the Options before or on the effective
date of the Change of Control, the Company shall issue all Common Stock
purchased by exercise of those Options, and those shares of Common Stock shall
be treated as issued and outstanding for purposes of the Change of Control. Upon
a Change of Control, where the outstanding Options are not assumed by the
surviving corporation or the acquiring corporation, the Plan shall terminate,
and any unexercised Options outstanding under the Plan at that date shall
terminate.

        15. TAX WITHHOLDING. The Committee may establish such rules and
procedures as it considers desirable in order to satisfy any obligation of the
Company to withhold the statutorily prescribed minimum amount of federal income
taxes or other taxes with respect to the exercise of any Option granted under
the Plan. If the Common Stock is traded in the over-the-counter market or upon
any securities exchange, such rules and procedures may provide that the
withholding obligation shall be satisfied by the Company withholding shares of
Common Stock otherwise issuable upon exercise of an Option in shares of Common
Stock in an amount equal to the statutorily prescribed minimum withholding
applicable to the ordinary income resulting from the exercise of that Option.

                                       -8-

<PAGE>   9

        16. NON-ASSIGNABILITY. Unless otherwise permitted by the Code and Rule
16b-3 under the Securities Exchange Act of 1934, as amended (if applicable), and
expressly permitted in the Option Agreement, an Option may not be transferred
other than by will or by the laws of descent and distribution. Except in the
case of the death or disability of a Participant, Options granted to a
Participant may be exercised only by the Participant.

        17. INTERPRETATION. The Committee shall interpret the Plan and shall
prescribe such rules and regulations in connection with the operation of the
Plan as it determines to be advisable for the administration of the Plan. The
Committee may rescind and amend its rules and regulations.

        18. AMENDMENT OR DISCONTINUANCE. The Plan may be amended or discontinued
by the Board or the Committee without the approval of the shareholders of the
Company, except that any amendment that would either materially increase the
number of securities that may be issued under the Plan or materially modify the
requirements of eligibility for participation in the Plan must be approved by
the shareholders of the Company.

        19. EFFECT OF PLAN. Neither the adoption of the Plan nor any action of
the Board or the Committee shall be deemed to give any Employee, non-employee
director, independent contractor or consultant any right to be granted an Option
to purchase Common Stock or any other rights except as may be evidenced by the
Option Agreement, or any amendment thereto, duly authorized by the Committee and
executed on behalf of the Company, and then only to the extent and on the terms
and conditions expressly set forth therein. The existence of the Plan and the
Options granted hereunder shall not affect in any way the right of the Board,
the Committee or the shareholders of the Company to make or authorize any
adjustment, recapitalization, reorganization or other change in the Company's
capital structure or its business, any merger or consolidation of

                                       -9-

<PAGE>   10

the Company, any issue of bonds, debentures, or shares of preferred stock ahead
of or affecting Common Stock or the rights thereof, the dissolution or
liquidation of the Company or any sale or transfer of all or any part of its
assets or business, or any other corporate act or proceeding. Nothing contained
in the Plan or in any Option Agreement shall confer upon any Employee,
non-employee director, independent contractor or consultant any right to (i)
continue in the employ of the Company or any of its Subsidiaries, or continue as
a director, independent contractor or consultant to the Company or any of its
Subsidiaries, or (ii) interfere in any way with the right of the Company or any
of its Subsidiaries to terminate his employment, directorship or independent
contractor or consultant relationship at any time.

        20. TERM. Unless sooner terminated by action of the Board, this Plan
will terminate on October 3, 2009. The Committee may not grant Options under the
Plan after that date, but Options granted before that date will continue to be
effective in accordance with their terms.

        21. DEFINITIONS. For the purpose of the Plan, unless the context
requires otherwise, the following terms shall have the meanings indicated:

        (a) "Board" means the Board of Directors of the Company.

        (b) "Code" means the Internal Revenue Code of 1986, as amended.

        (c) "Committee" means the committee of the Board appointed to administer
the Plan or, in the absence of such a Committee, means the Board.

        (d) "Common Stock" means the Common Stock which the Company is currently
authorized to issue or may in the future be authorized to issue (as long as the
common stock varies from that currently authorized, if at all, only in amount of
par value).

        (e) "Company" means StarNet Financial, Inc., a Delaware corporation.

                                      -10-

<PAGE>   11

        (f) "Employee" means an individual who is employed, within the meaning
of Section 3401 of the Code, by the Company or by a Subsidiary. The Committee
shall determine when an Employee's period of employment terminates and when such
period of employment is deemed to be continued during an approved leave of
absence.

        (g) "Incentive Option" means an Option granted under the Plan which
meets the requirements of Section 422 of the Code.

        (h) "Key Employee" means any Employee whose performance and
responsibilities are determined by the Committee to have a direct and
significant effect on the performance of the Company and its Subsidiaries.

        (i) "Nonqualified Option" means an Option granted under the Plan which
is not intended to be an Incentive Option.

        (j) "Option" means an option granted pursuant to the Plan to purchase
shares of Common Stock, whether granted as an Incentive Option or as a
Nonqualified Option.

        (k) "Option Agreement" means, with respect to each Option granted to a
Participant, the signed written agreement between the Participant and the
Company setting forth the terms and conditions of the Option.

        (l) "Option Period" means the period during which an Option may be
exercised.

        (m) "Parent" means any corporation in an unbroken chain of corporations
ending with the Company if, at the time of granting of the Option, each of the
corporations other than the Company owns stock possessing 50% or more of the
total combined voting power of all classes of stock in one of the other
corporations in the chain.

        (n) "Participant" means an individual to whom an Option has been granted
under the Plan.

                                      -11-

<PAGE>   12

        (o) "Plan" means this StarNet Financial, Inc. 1999 Stock Option Plan, as
set forth herein and as it may be amended from time to time.

        (p) "Qualifying Shares" means shares of Common Stock which either (i)
have been owned by the Participant for more than six months and have been "paid
for" within the meaning of Rule 144 promulgated under the Securities Act of
1933, as amended, or (ii) were obtained by the Participant in the public market.

        (q) "Subsidiary" means any corporation in an unbroken chain of
corporations beginning with the Company if, at the time of the granting of the
Option, each of the corporations other than the last corporation in the unbroken
chain owns stock possessing 80% or more of the total combined voting power of
all classes of stock in one of the other corporations in the chain, and
"Subsidiaries" means more than one of any of such corporations.

                                      -12-

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