Document:

<PAGE>

                                                                    EXHIBIT 10.2

                   AMENDED AND RESTATED EMPLOYMENT AGREEMENT

     THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT is entered into as of
December 14, 1999, between Shore Financial Corporation, a Virginia corporation
having its principal place of business at Onley, Virginia (hereinafter
"Employer"), and Scott C. Harvard, residing in Pungoteague, Virginia
(hereinafter "Executive").

                                   RECITALS:

     A.  The Executive has heretofore been employed, and currently is rendering
services to the Employer as President and Chief Executive Officer;

     B.  The Employer considers the continued availability of the Executive's
services to be important to the management and conduct of the Employer's
business and desires to secure for it the continued availability of the
Executive's services; and

     C.  The parties hereto desire to enter into this Amended and Restated
Employment Agreement whereby the Executive's services will continue to be made
available to the Employer on the terms and subject to the conditions set forth
herein.

     NOW, THEREFORE, in consideration of the mutual promises and covenants
hereinafter contained, it is agreed as follows:

1.  Term:
    -----

     The Employer shall employ Executive as its President and Chief Executive
Officer for a period that begins on December 14, 1999 and expires on December
31, 2002; provided that on December 31, 2001 and on each December 31st
thereafter (each such December 31st is referred to as the "Renewal Date"), this
Agreement will be automatically extended for an additional calendar year so as
to terminate two years from such Renewal Date.  This Agreement will not,
however, be extended if the Company gives written notice of such non-renewal to
the Executive no later than September 30 before the Renewal Date (the original
and any extended term of this Agreement is referred to as the "Employment
Period").

2.  Exclusive Employment:
    ---------------------

     Subject to normal and reasonable absences for reasons of illness, accident
and/or other incapacity, the Executive shall devote all of his attention and
energies to the business of the Employer and shall not, during the term of this
Agreement, be engaged in any other business activity whether or not such
business activity is pursued for gain, profit or other pecuniary advantage that
will significantly interfere with his duties as an executive officer of
Employer. With prior approval of the Board of Directors of the Employer,
Executive may serve on the boards of directors of other companies.
<PAGE>

3.  Titles and Duties:
    -----------------

     Subject at all times to the supervision and direction of the Employer's
Board of Directors, Executive will be employed as the President and Chief
Executive Officer of Employer and its banking subsidiary, Shore Bank, to
conduct, operate, manage and promote the business of the Employer and its
affiliated companies and act generally in a supervisory capacity.

4.  Compensation:
    -------------

     A.  Base Salary.  During the Employment Period, the Executive will be paid
an annual base salary of One Hundred Twenty Thousand Dollars ($120,000.00)
(hereinafter "Base Salary"). During the term of this Agreement, the Base Salary
will be reviewed and revised annually by the Board of Directors of the Employer
on or before each March 1st to reflect external conditions, Executive's
performance, and the changing size and nature of the Employer's operations.

     B.  Annual Bonus.  During the term of this Agreement, the Executive may be
entitled to receive annual cash bonus payments in such amounts and at such times
as may be determined by the Board of Directors of the Employer.

     C.   Additional Compensation.  In addition to the Base Salary and Annual
Bonus, if any, Executive shall receive, except as specifically modified or
stated hereinafter, the following:

        (i)    the use of a company-owned automobile;

        (ii)   coverage in the Employer's group health and life insurance plans;

        (iii)  officers' liability insurance;

        (iv)   payment by the Employer for all existing club memberships and
dues, plus any other memberships duly approved by the Board of Directors; and

        (v)    four (4) weeks vacation each year during the term hereof.

     The provisions of this Section 4C shall not serve to exclude Executive from
any other incentive or compensation plans adopted by the Board of Directors for
senior management.
<PAGE>

5.  Non-Disclosure:
    --------------

     The Executive recognizes and acknowledges that the Employer has secret
business practices and trade secrets, lists of customers and other matters which
are special and unique assets of the Employer's business. The Executive agrees
that he will not, during or after the term of his employment, disclose such
information or any part thereof to any person, firm or corporation, association
or other entity for any reason or purpose whatsoever.  In the event of a breach
or threat to breach by the Executive of any of the provisions of this paragraph,
the Employer shall be entitled to an injunction restraining the Executive from
disclosing, in whole or in part, such information or from rendering any services
to any firm, corporation, association or other entity to whom such information,
in whole or in part, has been disclosed or is threatened to be disclosed.
Nothing herein contained shall be construed as prohibiting the Employer from
pursuing any other remedies available to the Employer for such breach or
threatened breach, including and not limited to the recovery of damages from the
Executive.

6.  Disability or Death:
    -------------------

     In the event of Executive's permanent disability, the Base Salary and any
bonuses that would have otherwise been earned will continue to be paid for at
least six (6) months.  All payments will be reduced by the amount of any
disability income benefits for which the Executive is eligible under the
Employees disability benefit plan.  For purposes of this Employment Contract,
the phrase "permanently disabled" shall mean the inability of Executive to
perform his duties hereunder for a continuous period of more than four (4)
months.  Such permanent disability shall be determined by the insurance provider
under the terms and provisions set forth in the policy.  In the event of death
of the Executive, his estate will receive any bonuses that would have been
earned by him for that calendar year.

7.  Discharge or Resignation:
    -------------------------

     A.  The Employer's Board of Directors may terminate the Executive's
employment at any time, but any termination by the Employer's Board of Directors
other than termination for cause, shall not prejudice the Employee's right to
compensation or other benefits under this Agreement. The Executive shall have no
right to receive compensation or other benefits for any period after termination
for cause.  Termination for cause shall include termination because of the
Executive's personal dishonesty, incompetence, willful misconduct breach of
fiduciary duty involving personal profit, intentional failure to perform stated
duties, willful violation of any law, rule, or regulation (other than traffic
violations or similar offenses) or final cease-and-desist order, or material
breach of any provision of this Agreement.
<PAGE>

     B.  If the Executive is suspended and/or temporarily prohibited from
participating in the conduct of Shore Bank's affairs by a notice served under
Section 8(e)(3) or (g)(1) of (the) Federal Deposit Insurance Act (12 U.S.C.
1818(e)(3) and (g)(1) the Employer's obligations under this Agreement shall be
suspended as of the date of service unless stayed by appropriate proceedings.
If the charges in the notice are dismissed, the Employer may in its discretion
(i) pay Executive all or part of the compensation withheld while its contract
obligations were suspended and (ii) reinstate (in whole or in part) any of its
obligations which were suspended.

     C.  If the Executive is removed and/or permanently prohibited from
participating in the conduct of Shore Bank's affairs by an order issued under
Section 8(e)(4) or (g)(1) of the Federal Deposit Insurance Act (12 U.S.C.
1818(e)(4) or (g)(1), all obligations of the Employer under this Agreement shall
terminate as of the effective date of the order, but vested rights of the
contracting parties shall not be affected.

     D.  If Shore Bank is in default (as defined in Section 3(x)(1) of the
Federal Deposit Insurance Act), all obligations under the contract shall
terminate as of the date of default, but this paragraph (b)(4) shall not affect
any vested rights of the contracting parties.

     E.  All obligations under this Agreement shall be terminated, except to the
extent determined that continuation of this Agreement is necessary for the
continued operation of the Employer:

          (1) by the Director or his or her designee at the time the Federal
Deposit Insurance Corporation enters into an agreement to provide assistance to
or on behalf of Shore Bank under the authority contained in Section 13(c) of the
Federal Deposit Insurance Act; or

          (2) by the Director or his or her designee at the time the Director or
his or her designee approves a supervisory merger to resolve problems related to
operation of Shore Bank or when Shore Bank is determined by the Director to be
in an unsafe or unsound condition.

     F.  In the event that Executive is terminated without cause, then the
payment of Base Salary and all benefits in Section 4, with exception of the
automobile, shall continue until the expiration of twelve (12) months from the
date of termination.  For purposes of this Agreement, the definition of
termination without cause shall include (i) the voluntary resignation of
Executive due to any material curtailment of his responsibilities or duties;
(ii) Executive's termination due solely to the Chairman of the Board's decision
to personally handle Executive's responsibilities; and (iii) termination for any
ground which is not enumerated above as termination for cause.

8.  Change in Control of the Employer:
    ---------------------------------

     This Agreement will terminate in the event there is a change in control of
the Employer, and the Management Continuity Agreement, dated as of December 14,
1999 and as it may hereafter be amended, between the Employer and the Executive
will become effective and any termination benefits will be determined and paid
solely pursuant to such Management Continuity Agreement.
<PAGE>

9.   Place of Performance:
     ---------------------

     It is contemplated that Executive will perform his principal duties in
Onley, Virginia, except for temporary or emergency assignments.

10.   Notices:
      -------

     Any notice required or permitted to be given under this Agreement shall be
sufficient, if in writing, and if sent by registered and certified mail, to his
residence in the am of the Executive, and to its principal office in the case of
the Employer.

11.  Waivers:
     -------

     The waiver by the Employer or the Executive of any breach of any provision
of this Agreement by the other party shall not operate or be construed as a
waiver of any subsequent breach by the other party.

12.  Binding Effect:
     --------------

     The rights and obligations of the Employer under this Agreement shall inure
to the benefit of and shall be binding upon the successors and assigns of the
Employer and the rights, to the extent vested, and obligations of Executive
hereunder shall inure to the benefit of his heirs, executors and assigns.

13.  Construction:
     -------------

     Agreement shall be construed and interpreted under the laws of the State of
Virginia.

14.  Entire Agreement:
     -----------------

  This Agreement, together with the Management Continuity Agreement, dated
December 14, 1999 and as it may hereafter be amended, entered into between the
parties hereto, constitutes the entire agreement between the parties with
respect to the subject matter hereof and no agreements or representations, oral
or otherwise, express or implied, with respect to the subject matter hereof have
been made by either party which are not expressly set forth in this Agreement or
in the Management Continuity Agreement.  For purposes of this Agreement, the
term "Employer" includes any subsidiaries of the Employer.  This instrument
contains the entire Agreement of the parties and may not be altered, modified or
amended except in writing executed by both parties. The unenforceability of any
provision of this Agreement shall not be construed to, nor shall it, cause any
other provision of this Agreement to be unenforceable by reason thereof.
<PAGE>

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

                              Employer:

                              SHORE FINANCIAL CORPORATION

                              By   /s/ Henry P. Custis, Jr.
                                _________________________________
                                   Henry P. Custis, Jr.
                                   Chairman of the Board

                              Executive:

                                   /s/ Scott C. Harvard
                              ____________________________________
                                   Scott C. Harvard<PAGE>

                                                                    EXHIBIT 10.3

                        MANAGEMENT CONTINUITY AGREEMENT
                        -------------------------------

   This Agreement ("Agreement"), dated as of December 14, 1999, is between Shore
Financial Corporation, a Virginia corporation (the "Company"), and Scott C.
Harvard (the "Executive") and provides as follows.

   1.  Purpose
       -------

   The Company recognizes that the possibility of a Change in Control exists,
and the uncertainty and questions that it may raise among management may result
in the departure or distraction of management personnel to the detriment of the
Company and its shareholders.  Accordingly, the purpose of this Agreement is to
encourage the Executive to continue employment after a Change in Control by
providing reasonable employment security to the Executive and to recognize the
prior service of the Executive in the event of a termination of employment under
certain circumstances after a Change in Control.

   2.  Term of the Agreement
       ---------------------

   This Agreement is effective December 14, 1999 and will expire on December 31,
2002; provided that on December 31, 2000 and on each December 31st thereafter
(each such December 31st is referred to as the "Renewal Date"), this Agreement
will be automatically extended for an additional calendar year so as to
terminate three years from such Renewal Date.  This Agreement will not, however,
be extended if the Company gives written notice of such non-renewal to the
Executive no later than September 30 before the Renewal Date (the original and
any extended term of this Agreement is referred to as the "Change in Control
Period").

   3.  Employment after a Change in Control
       ------------------------------------

   If a Change in Control of the Company (as defined in Section 13) occurs
during the Change in Control Period and the Executive is employed by the Company
on the date the Change in Control occurs (the "Change in Control Date"), the
Company will continue to employ the Executive in accordance with the terms and
conditions of this Agreement for the period beginning on the Change in Control
Date and ending on the third anniversary of such date (the "Employment Period").
If a Change in Control occurs on account of a series of transactions, the Change
in Control Date is the date of the last of such transactions.
<PAGE>

   4.  Terms of Employment
       -------------------

   (a) Position and Duties.  During the Employment Period, (i) the Executive's
position, authority, duties and responsibilities will be at least commensurate
in all material respects with the most significant of those held, exercised and
assigned at any time during the 90-day period immediately preceding the Change
in Control Date and (ii) the Executive's services will be performed at the
location where the Executive was employed immediately preceding the Change in
Control Date or any office that is the headquarters of the Company and is less
than 35 miles from such location.

   (b)  Compensation.
        ------------

          (i) Base Salary.  During the Employment Period, the Executive will
receive an annual base salary (the "Annual Base Salary") at least equal to the
base salary paid or payable to the Executive by the Company and its affiliated
companies for the twelve-month period immediately preceding the Change of
Control Date.  During the Employment Period, the Annual Base Salary will be
reviewed at least annually and will be increased at any time and from time to
time as will be substantially consistent with increases in base salary generally
awarded in the ordinary course of business to other peer executives of the
Company and its affiliated companies.  Any increase in the Annual Base Salary
will not serve to limit or reduce any other obligation to the Executive under
this Agreement.  The Annual Base Salary will not be reduced after any such
increase, and the term Annual Base Salary as used in this Agreement will refer
to the Annual Base Salary as so increased.  The term "affiliated companies"
includes any company controlled by, controlling or under common control with the
Company.

          (ii) Annual Bonus.  In addition to the Annual Base Salary, the
Executive will be awarded for each year ending during the Employment Period an
annual bonus (the "Annual Bonus") in cash at least equal to the highest annual
bonus paid or payable, including by reason of any deferral, for the two years
immediately preceding the year in which the Change in Control Date occurs.  Each
such Annual Bonus will be paid no later than the end of the third month of the
year next following the year for which the Annual Bonus is awarded.

          (iii)  Incentive, Savings and Retirement Plans.  During the Employment
Period, the Executive will be entitled to participate in all incentive
(including stock incentive), savings and retirement, insurance plans, policies
and programs applicable generally to other peer executives of the Company and
its affiliated companies, but in no event will such plans, policies and programs
provide the Executive with incentive opportunities, savings opportunities and
retirement benefit opportunities, in each case, less favorable, in the
aggregate, than those provided by the Company and its affiliated companies for
the Executive under such plans, policies and programs as in effect at any time
during the six months immediately preceding the Change in Control Date.

          (iv) Welfare Benefit Plans.  During the Employment Period, the
Executive and/or the Executive's family, as the case may be, will be eligible
for participation in and will receive all benefits under welfare benefit plans,
policies and programs provided by the Company and its affiliated companies to
the extent applicable generally to other peer executives of the Company and its
affiliated companies, but in no event will such plans, policies and programs
provide the Executive with benefits that are less favorable, in the aggregate,
than the most favorable of such plans, policies and programs in effect at any
time during the six months immediately preceding the Change in Control Date.

                                      -2-
<PAGE>

          (v) Fringe Benefits.  During the Employment Period, the Executive will
be entitled to fringe benefits in accordance with the most favorable plans,
policies and programs of the Company and its affiliated companies in effect for
the Executive at any time during the six months immediately preceding the Change
in Control Date or, if more favorable to the Executive, as in effect generally
from time to time after the Change in Control Date with respect to other peer
executives of the Company and its affiliated companies.

          (vi) Vacation.  During the Employment Period, the Executive will be
entitled to paid vacation in accordance with the most favorable plans, policies
and programs of the Company and its affiliated companies in effect for the
Executive at any time during the six months immediately preceding the Change in
Control Date or, if more favorable to the Executive, as in effect generally from
time to time after the Change in Control Date with respect to other peer
executives of the Company and its affiliated companies.

   5.  Termination of Employment Following Change in Control
       -----------------------------------------------------

   (a) Death or Disability.  The Executive's employment will terminate
automatically upon the Executive's death during the Employment Period.  If the
Company determines in good faith that the Disability of the Executive has
occurred during the Employment Period, it may terminate the Executive's
employment.  For purposes of this Agreement, "Disability" means the Executive's
inability to perform his duties with the Company on a full time basis for 180
consecutive days or a total of at least 240 days in any twelve month period as a
result of the Executive's incapacity due to physical or mental illness (as
determined by an independent physician selected by the Board).

   (b) Cause.  The Company may terminate the Executive's employment during the
Employment Period for Cause.  For purposes of this Agreement, "Cause" means (i)
gross incompetence, gross negligence, willful misconduct in office or breach of
a material fiduciary duty owed to the Company or any affiliated company; (ii)
conviction of a felony or a crime of moral turpitude (or a plea of nolo
contendere thereto) or commission of an act of embezzlement or fraud against the
Company or any affiliated company; (iii) any material breach by the Executive of
a material term of this Agreement, including, without limitation, material
failure to perform a substantial portion of his duties and responsibilities
hereunder; or (iv) deliberate dishonesty of the Executive with respect to the
Company or any affiliated company.

                                      -3-
<PAGE>

   (c) Good Reason; Window Periods.  The Executive's employment may be
terminated (i) during the Employment Period by the Executive for Good Reason or
(ii) during the Window Periods by the Executive without any reason.  For
purposes of this Agreement, the "Window Periods" mean the 90-day periods
beginning on (i) the Change in Control Date (the "First Window Period"), or (ii)
if the Executive has not exercised his right to terminate his employment during
the First Window Period, the one-year anniversary of the Change in Control Date
(the "Second Window Period").  For purposes of this Agreement, "Good Reason"
means:

          (i) a material reduction in the Executive's duties or authority;

          (ii) a material adverse change in the Executive's overall working
environment;

          (iii)  a failure by the Company to comply with any of the
provisions of Section 4(b);

          (iv) the Company's requiring the Executive to be based at any office
or location other than that described in Section 4(a)(ii);

          (v) the failure by the Company to comply with and satisfy Section
7(b);

          (vi) the Executive is directed by the Board of Directors or an officer
of the Company or any affiliated company to engage in conduct that is unethical,
illegal or contrary to the Company's good business practices; or

          (vii)  the Company fails to honor any term or provision of this
Agreement;

Any good faith determination of Good Reason made by the Executive shall be
conclusive.

   (d) Notice of Termination.  Any termination during the Employment Period by
the Company or by the Executive for Good Reason or during the Window Period
shall be communicated by written Notice of Termination to the other party
hereto.  For purposes of this Agreement, a "Notice of Termination" shall mean a
notice which shall indicate the specific termination provision in this Agreement
relied upon.

                                      -4-
<PAGE>

   (e) Date of Termination.  "Date of Termination" means (i) if the Executive's
employment is terminated by the Company for Cause, or by the Executive during
the Window Period or for Good Reason, the date of receipt of the Notice of
Termination or any later date specified therein, as the case may be, (ii) if the
Executive's employment is terminated by the Company other than for Cause or
Disability, the date specified in the Notice of Termination (which shall not be
less than 30 nor more than 60 days from the date such Notice of Termination is
given), and (iii) if the Executive's employment is terminated for Disability, 30
days after Notice of Termination is given, provided that the Executive shall not
have returned to the full-time performance of his duties during such 30-day
period.

   6.  Compensation Upon Termination
       -----------------------------

   (a) Termination Without Cause or for Good Reason or During Window Periods.
The Executive will be entitled to the following benefits if, during the
Employment Period, the Company terminates his employment without Cause or the
Executive terminates his employment with the Company or any affiliated company
for Good Reason or during either the First or Second Window Period.

          (i) Accrued Obligations.  The Accrued Obligations are the sum of: (1)
the Executive's Annual Base Salary through the Date of Termination at the rate
in effect just prior to the time a Notice of Termination is given; (2) the
amount, if any, of any incentive or bonus compensation theretofore earned which
has not yet been paid; (3) the product of the Annual Bonus paid or payable,
including by reason of deferral, for the most recently completed year and a
fraction, the numerator of which is the number of days in the current year
through the Date of Termination and the denominator of which is 365; and (4) any
benefits or awards (including both the cash and stock components) which pursuant
to the terms of any plans, policies or programs have been earned or become
payable, but which have not yet been paid to the Executive (but not including
amounts that previously had been deferred at the Executive's request, which
amounts will be paid in accordance with the Executive's existing directions).
The Accrued Obligations will be paid to the Executive in a lump sum cash payment
within ten days after the Date of Termination;

          (ii) Salary Continuance Benefit.  The Salary Continuance Benefit is an
amount equal to 2.99 times the Executive's Final Compensation.  For purposes of
this Agreement, "Final Compensation" means the Annual Base Salary in effect at
the Date of Termination, plus the highest Annual Bonus paid or payable for the
two most recently completed years and any amount contributed by the Executive
during the most recently completed year pursuant to a salary reduction agreement
or any other program that provides for pre-tax salary reductions or compensation
deferrals.  The Salary Continuance Benefit will be paid to the Executive in a
lump sum cash payment not later than the 45th day following the Date of
Termination;

                                      -5-
<PAGE>

          (iii)  Welfare Continuance Benefit.  For 36 months following the Date
of Termination, the Executive and his dependents will continue to be covered
under all health and dental plans, disability plans, life insurance plans and
all other welfare benefit plans (as defined in Section 3(1) of ERISA) ("Welfare
Plans") in which the Executive or his dependents were participating immediately
prior to the Date of Termination (the "Welfare Continuance Benefit").  The
Company will pay all or a portion of the cost of the Welfare Continuance Benefit
for the Executive and his dependents under the Welfare Plans on the same basis
as applicable, from time to time, to active employees covered under the Welfare
Plans and the Executive will pay any additional costs.  If participation in any
one or more of the Welfare Plans included in the Welfare Continuance Benefit is
not possible under the terms of the Welfare Plan or any provision of law would
create an adverse tax effect for the Executive or the Company due to such
participation, the Company will provide substantially identical benefits
directly or through an insurance arrangement.  The Welfare Continuance Benefit
as to any Welfare Plan will cease if and when the Executive has obtained
coverage under one or more welfare benefit plans of a subsequent employer that
provides for equal or greater benefits to the Executive and his dependents with
respect to the specific type of benefit.  The Executive or his dependents will
become eligible for COBRA continuation coverage as of the date the Welfare
Continuance Benefit ceases for all health and dental benefits.

   (b) Death.  If the Executive dies during the Employment Period, this
Agreement will terminate without any further obligation on the part of the
Company under this Agreement, other than for (i) payment of the Accrued
Obligations and three months of the Executive's Base Salary (which shall be paid
to the Executive's beneficiary designated in writing or his estate, as
applicable, in a lump sum cash payment within 30 days of the date of death);
(ii) the timely payment or provision of the Welfare Continuance Benefit to the
Executive's spouse and other dependents for 36 months following the date of
death; and (iii) the timely payment of all death and retirement benefits
pursuant to the terms of any plan, policy or arrangement of the Company and its
affiliated companies.

   (c) Disability. If the Executive's employment is terminated because of the
Executive's Disability during the Employment Period, this Agreement will
terminate without any further obligation on the part of the Company under this
Agreement, other than for (i) payment of the Accrued Obligations and three
months of the Executive's Base Salary (which shall be paid to the Executive in a
lump sum cash payment within 30 days of the Date of Termination); (ii) the
timely payment or provision of the Welfare Continuance Benefit for 36 months
following the Date of Termination; and (iii) the timely payment of all
disability and retirement benefits pursuant to the terms of any plan, policy or
arrangement of the Company and its affiliated companies.

                                      -6-
<PAGE>

   (d) Cause; Other than for Good Reason.  If the Executive's employment is
terminated for Cause during the Employment Period, this Agreement will terminate
without further obligation to the Executive other than the payment to the
Executive of the Annual Base Salary through the Date of Termination, plus the
amount of any compensation previously deferred by the Executive.  If the
Executive terminates employment during the Employment Period, excluding a
termination either for Good Reason or during the Window Period, this Agreement
will terminate without further obligation to the Executive other than for the
Accrued Obligations (which will be paid in a lump sum in cash within 30 days of
the Date of Termination) and any other benefits to which the Executive may be
entitled pursuant to the terms of any plan, program or arrangement of the
Company and its affiliated companies.

   (e) Gross-Up Payment.  In the event any payment or distribution by the
Company to or for the benefit of the Executive (whether paid or payable or
distributed or distributable pursuant to the terms of this Agreement or
otherwise, but determined without regard to any additional payments required
under this Section 6(e)) (a "Payment") would be subject to the excise tax
imposed by Section 4999 of the Internal Revenue Code of 1986 (the "Code") or any
interest or penalties are incurred by the Executive with respect to such excise
tax (collectively, the "Excise Tax"), then the Executive will be entitled to
receive an additional payment (a "Gross-Up Payment") in an amount such that
after payment by the Executive of all taxes (including any income taxes and
interest or penalties imposed with respect to such taxes) and the Excise Tax
imposed on the Gross-Up Payment, the Executive retains an amount of the Gross-Up
Payment equal to the Excise Tax imposed on the Payments.  All determinations
required to be made under this Section 6(e), including whether and when a Gross-
Up Payment is required and the amount of such Gross-Up Payment, will be made by
the independent accounting firm of the Company immediately prior to the
Executive's termination of employment (the "Accounting Firm").  All fees and
expenses of the Accounting Firm will be borne solely by the Company, and any
determination by the Accounting Firm will be binding upon the Company and the
Executive.  Any Gross-Up Payment, as determined pursuant to this Section 6(e),
will be paid by the Company to the Executive within ten days of the receipt of
the Accounting Firm's determination.

          (i) If the Accounting Firm determines that no Excise Tax is payable by
the Executive, it shall so indicate to the Executive in writing.

          (ii) In the event there is an under-payment of the Gross-Up Payment
due to the uncertainty in the application of Section 4999 of the Code at the
time of the initial determination by the Accounting Firm and the Executive
thereafter is required to make a payment of any Excise Tax, the Accounting Firm
will determine the amount of any such under-payment that has occurred and such
amount will be promptly paid by the Company to or for the benefit of the
Executive.

                                      -7-
<PAGE>

7.  Binding Agreement; Successors
    -----------------------------

   (a) This Agreement will be binding upon and inure to the benefit of the
Executive (and his personal representative), the Company and any successor
organization or organizations which shall succeed to substantially all of the
business and property of the Company, whether by means of merger, consolidation,
acquisition of all or substantially of all of the assets of the Company or
otherwise, including by operation of law.

   (b) The Company will require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially all of the
business and/or assets of the Company to assume expressly and agree to perform
this Agreement in the same manner and to the same extent that the Company would
be required to perform it if no such succession had taken place.

   (c) For purposes of this Agreement, the term "Company" includes any
subsidiaries of the Company and any corporation or other entity which is the
surviving or continuing entity in respect of any merger, consolidation or form
of business combination in which the Company ceases to exist; provided, however,
that for purposes of determining whether a Change in Control has occurred
herein, the term "Company" refers to Shore Financial Corporation or its
successors.

   8.  Fees and Expenses; Mitigation
       -----------------------------

   (a) The Company will pay or reimburse the Executive, on a current basis, for
all costs and expenses, including without limitation court costs and reasonable
attorneys' fees, incurred by the Executive (i) in contesting or disputing any
termination of the Executive's employment or (ii) in seeking to obtain or
enforce any right or benefit provided by this Agreement, in each case regardless
of whether or not the Executive's claim is upheld by a court of competent
jurisdiction; provided, however, the Executive will be required to repay any
such amounts to the Company to the extent that a court issues a final and non-
appealable order setting forth the determination that the position taken by the
Executive was frivolous or advanced by him or her in bad faith.

   (b) The Executive shall not be required to mitigate the amount of any payment
the Company becomes obligated to make to the Executive in connection with this
Agreement, by seeking other employment or otherwise.  Except as specifically
provided above with respect to the Wefare Continuance Benefit, the amount of any
payment provided for in Section 6 shall not be reduced, offset or subject to
recovery by the Company by reason of any compensation earned by the Executive as
the result of employment by another employer after the Date of Termination, or
otherwise.

   9.  No Employment Contract
       ----------------------

   Nothing in this Agreement will be construed as creating an employment
contract between the Executive and the Company prior to Change in Control.

                                      -8-
<PAGE>

   10.  Outplacement Services
        ---------------------

   If the Executive is entitled to the severance benefits under Section 6(a),
the Executive will be entitled to receive complete outplacement services,
including job search services, paid by the Company up to a total of $25,000.
The services will be provided by a recognized outplacement organization selected
by the Executive with the approval of the Company (which approval will not be
unreasonably withheld).  The services will be provided for up to two years after
the Date of Termination.

   11.  Continuance of Welfare Benefits Upon Death
        ------------------------------------------

   If the Executive dies while receiving a Welfare Continuation Benefit, the
Executive's spouse and other dependents will continue to be covered under all
applicable Welfare Plans during the remainder of the 36-month coverage period.
The Executive's spouse and other dependents will become eligible for COBRA
continuation coverage for health and dental benefits at the end of such 36-month
period.

   12.  Notice
        ------

   Any notices and other communications provided for by this Agreement will be
sufficient if in writing and delivered in person or sent by registered or
certified mail, postage prepaid (in which case notice will be deemed to have
been given on the third day after mailing), or by overnight delivery by a
reliable overnight courier service (in which case notice will be deemed to have
been given on the day after delivery to such courier service).  Notices to the
Company shall be directed to the Secretary of the Company, with a copy directed
to the Chairman of the Board of the Company.  Notices to the Executive shall be
directed to his last known address.

   13.  Definition of a Change in Control
        ---------------------------------

   For purposes of this Agreement, a "Change in Control" means:

   (a) The acquisition by any Person of beneficial ownership of 20% or more of
the then outstanding shares of common stock of the Company;

   (b) Individuals who constitute the Board on the date of this Agreement (the
"Incumbent Board") cease to constitute a majority of the Board, provided that
any director whose nomination was approved by a vote of at least two-thirds of
the directors then comprising the Incumbent Board will be considered a member of
the Incumbent Board, but excluding any such individual whose initial assumption
of office is in connection with an actual or threatened election contest
relating to the election of the directors of the Company (as such terms are used
in Rule 14a-11 promulgated under the Securities Exchange Act of 1934 (the
"Exchange Act"));

                                      -9-
<PAGE>

   (c) Approval by the shareholders of the Company of a reorganization, merger,
share exchange or consolidation (a "Reorganization"), provided that shareholder
approval of a Reorganization will not constitute a Change in Control if, upon
consummation of the Reorganization, each of the following conditions is
satisfied:

          (i) more than 60% of the then outstanding shares of common stock of
the corporation resulting from the Reorganization is beneficially owned by all
or substantially all of the former shareholders of the Company in substantially
the same proportions as their ownership existed in the Company immediately prior
to the Reorganization;

          (ii) no Person beneficially owns 20% or more of either (1) the then
outstanding shares of common stock of the corporation resulting from the
transaction or (2) the combined voting power of the then outstanding voting
securities of such corporation entitled to vote generally in the election of
directors; and

          (iii)  at least a majority of the members of the board of directors of
the corporation resulting from the Reorganization were members of the Incumbent
Board at the time of the execution of the initial agreement providing for the
Reorganization.

   (d) Approval by the shareholders of the Company of a complete liquidation or
dissolution of the Company, or of the sale or other disposition of all or
substantially all of the assets of the Company.

   (e) For purposes of this Agreement, "Person" means any individual, entity or
group (within the meaning of Section 13(d)(3) of the Exchange Act, other than
any employee benefit plan (or related trust) sponsored or maintained by the
Company or any affiliated company, and "beneficial ownership" has the meaning
given the term in Rule 13d-3 under the Exchange Act.

   14.  Confidentiality
        ---------------

   The Executive will hold in a fiduciary capacity for the benefit of the
Company all secret or confidential information, knowledge or data relating to
the Company or any of its affiliated companies and their respective businesses,
which was obtained by the Executive during the Executive's employment by the
Company or any of its affiliated companies and which will not be or become
public knowledge.  After termination of the Executive's employment with the
Company, the Executive will not, without the prior written consent of the
Company or except as may otherwise be required by law or legal process,
communicate or divulge any such information, knowledge or data to anyone other
than the Company and those designated by it.  In no event shall an asserted
violation of the provisions of this Section 14 constitute a basis for deferring
or withholding any amounts otherwise payable to the Executive under this
Agreement.

                                      -10-
<PAGE>

   15.  Miscellaneous
        -------------

   No provision of this Agreement may be amended, modified, waived or discharged
unless such amendment, modification, waiver or discharge is agreed to in a
writing signed by the Executive and the Chairman of the Board or President of
the Company.  No waiver by either party hereto at any time of any breach by the
other party hereto of, or of compliance with, any condition or provision of this
Agreement to be performed by such other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same or at any prior or
subsequent time.  No agreements or representations, oral or otherwise, express
or implied, with respect to the subject matter hereof have been made by either
party which are not expressly set forth in this Agreement.

   16.  Governing Law
        -------------

   The validity, interpretation, construction and performance of this Agreement
shall be governed by the laws of the Commonwealth of Virginia.

   17.  Validity
        --------

   The invalidity or unenforceability of any provision of this Agreement shall
not affect the validity or enforceability of any other provision of this
Agreement, which shall remain in full force and effect.

   IN WITNESS WHEREOF, this Agreement has been executed as a sealed instrument
by Shore Financial Corporation by its duly authorized officer, and by the
Executive, as of the date first above written.

                                             SHORE FINANCIAL CORPORATION

                                             By:  /s/ Henry P. Custis, Jr.
                                                ________________________________
                                                  Henry P. Custis, Jr.
                                                  Chairman of the Board

                                             EXECUTIVE:
                                                     /s/ Scott C. Harvard
                                                  ______________________________
                                                       Scott C. Harvard

                                      -11-

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