Document:

<PAGE>

                              EMPLOYMENT AGREEMENT

This Employment Agreement ("Agreement") is made as of June 27, 2002, between
Resource Bank ("Resource"), and James M. Miller ("Employee").

     WHEREAS, Resource wishes to continue to employ Employee to serve as its
Executive Vice President, and Employee is willing to accept such employment in
accordance with the terms of this Agreement; and

     WHEREAS, Employee previously has been employed by Resource pursuant to the
terms and conditions of an Employment Agreement dated January 1, 1999 ("Original
Employment Agreement"); and

     WHEREAS, Employee and Resource desire to terminate the Original Employment
Agreement and enter into this Agreement; and

     WHEREAS, Employee recognizes the importance to Resource and to the public
of maintaining the high standards and quality associated with Resource's name
and reputation, and is willing to maintain such high standards and quality;

     NOW, THEREFORE, it is agreed as follows:

1.   TERM OF EMPLOYMENT: Subject to the provisions of this Agreement, Resource
will employ Employee as its Executive Vice President for an initial term of five
(5) years, beginning on June 27, 2002 and expiring on June 26, 2007 ("Initial
Term"). Not less than six (6) months prior to the expiration of the Initial
Term, Resource's Board of Directors (the "Resource Board of Directors") shall
conduct and complete a review of Employee's performance.

     1.1 If the Resource Board of Directors determines upon such review that
Employee has performed in accordance with Resource's performance criteria, no
further action will be necessary, and Resource shall employ Employee for an
additional two-year period under the terms herein. Thereafter, this Agreement
shall automatically renew for successive two-year periods unless either party
gives three (3) months written notice prior to the expiration of any two-year
term.

     1.2 If the Resource Board of Directors determines upon such review that
Employee has not performed in accordance with Resource's performance criteria,
it shall so notify Employee in writing at least three (3) months prior to the
expiration of the Initial Term hereof that this Agreement will not be renewed
("Notice of Non-Renewal"), and this Agreement shall expire and the employment
created herein shall end at the conclusion of the Initial Term. Employee shall
also receive three additional month's regular base salary following expiration
pursuant to Resource's regular pay schedule.

     1.3 The regular base salary payable both prior to and following expiration
as provided in subparagraph 1.2 shall not be paid if Employee competes with
Resource as that term is used in subparagraphs 7.2 and 7.3 hereof.

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     1.4 Resource, in its sole discretion, shall have the option but not the
obligation of relieving Employee of actually performing any services following
the giving of a Notice of Non-Renewal. Employee shall nonetheless be paid as
provided in subparagraph 1.2 provided he neither seeks or accepts employment in
competition with Resource as provided in subparagraph 1.3 nor breaches any other
provision hereof.

2.   DUTIES: During the period of employment hereunder, Employee will devote his
best efforts and substantially his full time to the business and affairs of
Resource, perform such services not inconsistent with his position as are
designated by the Resource Board of Directors, and use his best efforts to
promote the interest of Resource. Employee pledges that during the term of this
Agreement, Employee shall not, directly or indirectly, engage in any business
that could detract from Employee's ability to apply his best efforts to the
performance of his duties hereunder. Employee further agrees to comply with all
rules, regulations and policies established or issued by Resource.

3.   COMPENSATION: Resource will pay Employee a regular base salary commensurate
with his position and performance, such salary to be determined from time to
time by the Resource Board of Directors, but to be not less than $157,500 per
year upon the initiation of this Agreement. Such salary will be payable in
periodic installments on the same basis as that of other employees of Resource
who hold executive positions. In addition, Employee will be eligible to
participate in Resource's Bonus Program as determined from time to time by the
Resource Board of Directors.

4.   BENEFITS: Employee will participate in the various employee benefit,
disability and retirement plans provided for similarly situated employees
according to the terms and conditions of those plans, as determined by the
Resource Board of Directors. During each full year of employment, Employee shall
have four weeks paid vacation. During Employee's employment with Resource,
Employee will be provided with a leased automobile and shall also receive such
other perquisites as are set forth on the Summary Sheet attached to this
Agreement. Resource reserves the right to modify, eliminate, or add to any of
the foregoing benefits as it deems appropriate.

5.   DEATH: If Employee should die during the term of this Agreement, Resource
will, in lieu of payments due under other provisions of this Agreement, pay to
Employee's estate for a period of 3 months, Employee's regular base salary at
the time of the Employee's death plus any previously accrued and unpaid base
salary. Thereafter, Resource will have no further obligation to Employee or his
estate under this Agreement.

6.   DISABILITY: In the event that Employee, by reason of physical or mental
incapacity or disability ("Disability"), is unable, with or without reasonable
accommodation, to perform his duties and responsibilities under this Agreement,
then Resource will pay to Employee his regular base salary for a six-month
period following the date on which the Disability first begins, after which time
it is intended that the payments under the disability insurance maintained by
Resource for Employee will be in effect. Thereafter, Resource will have no
obligation to pay Employee any compensation under this Agreement; provided,
however, that for a period of one (1) year following the date the Disability
first begins, Employee shall have the right to return to employment under this
Agreement if Employee, with or without reasonable accommodation, is

                                       2

<PAGE>

again able to fully perform his duties. Upon such a return to employment,
Employee shall work as mutually agreed upon by Resource and Employee, and
Employee shall receive the same compensation and benefits as set forth in this
Agreement, subject to appropriate proration of compensation if Employee works
less than the same schedule he had previously worked.

7.   TERMINATION WITHOUT CAUSE; SEVERANCE PAY:

     7.1 Resource may terminate Employee's employment immediately and without
cause. However, if Resource terminates employee's employment pursuant to this
Section 7.1, Resource shall pay to Employee his regular base salary payable in
periodic installments on the same schedule as other executive employees of
Resource through the lesser of (i) the remainder of the Initial Term of this
Agreement or (ii) a period of eighteen (18) months following the date on which
employment is terminated ("Severance Pay"). Notwithstanding the foregoing, in
the event Employee elects to compete with Resource as described below,
Resource's obligation to pay the Severance Pay shall terminate immediately.

     7.2 Employee agrees that in the event he competes, directly or indirectly,
with Resource in the Business (as defined in paragraph 7.3 below) within a
30-mile radius of any Resource office that exists on the date of such
termination he will forfeit any remaining Severance Pay from the first date of
such competition.

     7.3 It is the specific intent of the parties that as long as Employee is
receiving Severance Pay, Employee shall be restricted from competing directly or
indirectly within a thirty mile radius of any segment of the Business in which
Employee engaged prior to the termination of employment and from any segment of
the Business about which Employee acquired proprietary or confidential
information during the course of his employment. For purposes of this paragraph
7, (i) the Business shall mean the business of banking and mortgage lending and
(ii) Resource shall mean collectively Resource, Resource's parent corporation
Resource Bankshares Corporation and any of their direct or indirect subsidiaries
or any other entity that is an affiliate of Resource as the term affiliate is
defined under Rule 12b-2 (or any successor rule thereto) under the Securities
Exchange Act of 1934. Employee agrees that competition shall include engaging in
competitive activity, either as an individual, as a partner, as a joint venturer
with any other person or entity, or as an employee, agent, or representative of
any other person or entity, or otherwise being associated in a competitive
capacity with any business entity which directly or indirectly competes with
Resource in the Business. Employee further agrees that for as long as he
receives severance pay, he will not induce or attempt to induce any of the
employees of Resource to terminate their employment relationship with Resource.

     7.4 Resource and Employee have examined in detail this paragraph 7 and
agree that the restraint imposed upon Employee is reasonable in light of the
legitimate interests of Employer, and it is not unduly harsh upon Employee's
ability to earn a livelihood.

     7.5 Notwithstanding any provision of this Agreement to the contrary, any
payments made to Employee pursuant to this Agreement, or otherwise, are subject
to and conditional upon their compliance with 12 U.S.C. (S) 1828(k) and any
regulations promulgated thereunder.

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8.   TERMINATION FOR CAUSE: The Employee's employment may be terminated at any
time by Resource for "cause." As used in this Agreement, the term cause means
(i) personal dishonesty; (ii) gross neglect related to employment; (iii)
incompetence; (iv) willful misconduct; (v) breach of loyalty or fiduciary duty
to Resource; (vi) intentional failure to perform assigned or agreed upon duties;
(vii) willful violation of any law, rule, or regulation (other than traffic
violations or similar offenses); or (viii) material breach of any provision of
this Agreement. Termination by Resource for cause shall be determined by the
vote of at least 51% of all of the members of the Resource Board of Directors.
If the employment is so terminated, Employee will be entitled to receive any
regular salary earned and employee benefits accrued as of the date of such
termination, but Resource will have no further obligation to Employee hereunder
from and after such date.

9.   TERMINATION BY EMPLOYEE: Employee may resign from the employment of
Resource at any time upon ninety (90) days prior written notice. Upon such
resignation, Employee shall have no rights to any further compensation or
benefits after the ninety (90) day notice period has expired. Resource reserves
the option but not the obligation to relieve Employee from performance of work
during this period, but absent subsequent breach hereof, Resource shall be
obligated to pay Employee the Employee's regular base salary for the entire
90-day notice period.

10.  CHANGE OF CONTROL: If there shall occur a "Change of Control of Resource
Bankshares Corporation" as defined below, the Employee may be assigned such
other duties, responsibilities and compensation as would be reasonably
equivalent under the circumstances and acceptable to the Employee in his
reasonable discretion. Upon such occurrence, if the Employee shall not be given
such reasonably equivalent duties, responsibilities and compensation, he may be
terminated or he may resign; and, in either such case, Employee shall receive in
lieu of any payments pursuant to paragraph 7, a one-time payment of 2.99 times
the average of the Employee's last three (3) years' reported W-2 income
attributable to employment by Resource. As used in this paragraph 10, a Change
of Control of Resource Bankshares Corporation ("Resource Bankshares") shall be
deemed to have occurred if any of the following occur:

     10.1 A person, entity, or group (other than Resource Bankshares, any
Resource Bankshares subsidiary, any Resource Bankshares benefit plan, or any
underwriter temporarily holding securities for an offering of such securities)
acquires ownership of more than 50% of the undiluted total voting power of
Resource Bankshares' then outstanding securities eligible to vote to elect
members of Resource Bankshares' Board of Directors ("Company Voting
Securities"); or

     10.2 The individuals (A) who, as of the date of this Agreement, constitute
the Board of Directors of Resource Bankshares (the "Original Directors") or (B)
who thereafter are elected to the Board and whose election, or nomination for
election, to the Board was approved by a vote of at least two-thirds (2/3) of
the Original Directors then still in office (such directors becoming "Additional
Original Directors" immediately following their election) or (C) who are elected
to the Board and whose election, or nomination for election, to the Board was
approved by a vote of at least two-thirds (2/3) of the Original Directors and
Additional Original Directors then still in office (such directors also becoming
"Additional Original Directors" immediately following their election) cease for
any reason to constitute a majority of the members of the Board; or

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<PAGE>

     10.3 Consummation of a merger or consolidation of Resource Bankshares into
any other entity unless the holders of the Company Voting Securities outstanding
immediately before such consummation, together with any trustee or other
fiduciary holding securities under a Resource Bankshares benefit plan, hold
securities that represent immediately after such merger or consolidation more
than 50% of the combined voting power of the then outstanding voting securities
of either Resource Bankshares or the other surviving entity or its parent; or

     10.4 The shareholders of Resource Bankshares approve (i) a plan of complete
liquidation or dissolution of Resource Bankshares or (ii) an agreement for
Resource Bankshares' sale or disposition of all or substantially all of Resource
Bankshares' assets, (i.e., 50% or more of the total assets of Resource
Bankshares) and such liquidation, dissolution, sale, or disposition is
consummated.

11.  REQUIRED PROVISIONS:

     11.1 If Employee is suspended and/or temporarily prohibited from
participating in the conduct of Resource's affairs by a notice served under the
Federal Deposit Insurance Act, Resource's obligations under this Agreement shall
be suspended as of the date of service. If the charges in the notice are
dismissed, Resource may, in its discretion, (i) pay Employee all or part of the
compensation withheld while its obligations under the Agreement were suspended,
and (ii) reinstate (in whole or in part) any of its obligations which were
suspended.

     11.2 If Employee is removed and/or permanently prohibited from
participating in the conduct of Resource's affairs by an order issued under the
Federal Deposit Insurance Act, all obligations of Resource under this Agreement
shall terminate as of the effective date of the order, but the Employee's vested
rights shall not be affected.

     11.3 If Resource is in default as defined in the Federal Deposit Insurance
Act, all obligations under this Agreement shall terminate as of the date of
default, but the operation of this subparagraph 11.3 shall not affect any of
Employee's vested rights.

12.  NONDISCLOSURE:

     12.1 Employee agrees to hold and safeguard any information about Resource
gained by Employee during the course of Employee's employment. Employee shall
not, without the prior written consent of Resource, disclose or make available
to anyone for use outside Resource's organization at any time, either during his
employment or subsequent to any termination of his employment, however such
termination is effected, whether by Employee or Resource, with or without cause,
or expiration or nonrenewal of this Agreement, any information about Resource or
its customers or suppliers, whether or not such information was developed by
Employee, except as required in the performance of Employee's duties for
Resource.

     12.2 Employee understands and agrees that any information about Resource or
Resource's customers is the property of Resource and is essential to the
protection of Resource's goodwill and to the maintenance of Resource's
competitive position and accordingly should be kept secret. Such information
shall include, but not be limited to, information containing

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<PAGE>

Resource's promotional plans and strategies, pricing strategies, customers and
prospective customers, customer lists, identity of key personnel in the employ
of customers and prospective customers, computer programs, system documentation,
manuals, ideas, or any other records or information belonging to Resource or
relating to Resource's Business. As used in this paragraph 12, the terms
Business and Resource shall have the same meanings given to such terms in
paragraph 7.

     12.3 Notwithstanding anything in paragraph 12.1 or paragraph 12.2 to the
contrary, Resource agrees that the obligations of Employee set forth in
paragraphs 12.1 and 12.2 shall not apply to any information which (i) becomes
known generally to the public through no fault of the Employee; (ii) is required
by applicable law, legal process or any order or mandate of a court or other
governmental authority to be disclosed; or (iii) is reasonably believed by
Employee, based upon the advice of legal counsel, to be required to be disclosed
in defense of a lawsuit or other legal or administrative action brought against
Employee; provided, that in the case of clauses (ii) or (iii) Employee shall
give Resource reasonable advance written notice of the information intended to
be disclosed and the reasons and circumstances surrounding such disclosure in
order to permit Resource to seek a protective order or other appropriate request
for confidential treatment of the applicable information.

13.  NON-SOLICITATION OF EMPLOYEES: Employee agrees that during his employment
hereunder and for a period of one year following termination of Employee's
employment, whether such termination is voluntary or involuntary, effected by
Resource or by Employee, regardless of cause, Employee shall not, directly or
indirectly, hire, solicit or induce or attempt to hire, solicit or induce, any
employee of Resource to become employed by Employee or any other person or
entity or to perform services for remuneration for Employee or any other person
or entity regardless of the structure or nature of any such remunerative
relationship. For purposes of this paragraph 13, an employee of Resource shall
mean any individual who was employed by Resource at the time of Employee's
termination or at any time during the six-month period immediately preceding
such termination. As used in this paragraph 13, the term Resource shall have the
same meaning given to such term in paragraph 7.

14.  ENTIRE AGREEMENT: This Agreement [and the attached Summary Sheet] supersede
any and all other agreements, either oral or in writing, between the parties
hereto with respect to the employment of Employee by Resource or any affiliate
of Resource (including without limitation the Original Employment Agreement) and
contains all the covenants and agreements between the parties with respect to
such employment. Each party to this Agreement acknowledges that no
representations, inducements, promises or agreements, orally or otherwise, have
been made by any party, or anyone acting on behalf of any party, which are not
embodied herein, and that no other agreement, statement or promise not contained
in this Agreement [and the attached Summary Sheet] will be valid or binding. Any
modification of these Agreements will be effective only if it is in writing
signed by the party to be charged.

15.  BINDING EFFECT: This Agreement will be binding upon and inure to the
benefit of each of the parties and their successors.

16.  LAW GOVERNING AGREEMENT: This Agreement will be governed and construed in
accordance with the laws of the Commonwealth of Virginia.

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<PAGE>

17.  CONFLICT WITH REGULATIONS: The requirements of 12 C.F.R. (S) 563.39(b) (the
"Employment Agreement Regulations") shall be made part of this Agreement and are
incorporated by reference. If any provision of this Agreement conflicts with the
Employment agreement Regulations, the Employment Agreement Regulations shall
govern.

18.  PARTIAL INVALIDITY: If any provision of this Agreement is held by a court
of competent jurisdiction to be invalid, void or unenforceable, the remaining
provisions will nevertheless continue in full force and effect.

19.  SEVERABILITY: If any clause or provision of this Agreement is held to be
illegal, invalid, or unenforceable under present or future laws effective during
the term hereof, then the remainder of this Agreement shall not be affected
thereby, and in lieu of each clause or provision of this Agreement which is
illegal, invalid or unenforceable, and specifically including the restrictions
on competition in paragraph 7, there shall be added, as a part of this
Agreement, a clause or provision as similar in terms to such illegal, invalid or
unenforceable clause or provision as may be possible and as may be legal, valid,
and enforceable.

20.  NOTICES: Any notices to be given hereunder by either party to the other may
be effected either by personal delivery in writing or by mail, registered or
certified, postage prepaid, with return receipt requested. Mailed notices will
be addressed to the parties at the addresses appearing herein, but each party
may change his address by written notice in accordance with this paragraph.
Notices delivered personally will be deemed communicated as of actual receipt;
mailed notices will be deemed communicated as of five (5) days after mailing.

          TO:      Resource Bank
                   Attention:  Debra C. Dyckman
                   3720 Virginia Beach Boulevard
                   Virginia Beach, Virginia 23452

          TO:      James M. Miller
                   1372 Little Neck Road
                   Virginia Beach, VA 23452

21.  COUNTERPARTS: This Agreement may be executed in counterparts, together
which shall constitute one and the same instrument.

22.  ARBITRATION: Except for actions initiated by Resource to enjoin a breach
by, and/or recover damages from, Employee related to violation of any of the
restrictive covenants in paragraphs 7, 12 or 13, which Resource may bring in an
appropriate court of law or equity, any other unresolved dispute or controversy
arising under or in connection with Employee's employment and/or this Agreement
shall be settled or resolved exclusively by arbitration conducted in accordance
with the rules of the American Arbitration Association then in effect. This
includes any and all federal, state and/or local claims based upon statute,
common law and/or local ordinance, including, but not limited to claims under
Title VII of the Civil Rights Act of 1964, as amended, the Age Discrimination in
Employment Act, the Family and Medical Leave Act, and the Americans with
Disabilities Act. The arbitrator(s) shall not have the

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authority to add to, detract from or modify this Agreement except as permitted
by the Agreement. The arbitrator's decision shall be final and binding, and
judgment may be entered on the decision in any court having competent
jurisdiction. The arbitration shall be held in Norfolk or Virginia Beach,
Virginia, as selected by Resource. The direct expense of the arbitration shall
be borne by Resource but each party will bear its own expenses and legal fees;
provided, however, that from and after the date of a Change of Control of
Resource Bankshares (as defined in paragraph 10), Resource shall reimburse
Employee for up to (but not in excess of) $40,000 of Employee's documented legal
fees and expenses incurred by Employee in connection with any arbitration
pursuant to this paragraph 22 (it being the specific intent of the parties that
such reimbursement obligation of Resource shall apply only to arbitration
proceedings and not to any action by Resource to enforce the restrictive
covenants of paragraphs 7, 12 or 13 in a court of law or equity as contemplated
by the first sentence of this paragraph 22).

     IN WITNESS WHEREOF, Resource Bank has caused this Agreement to be executed
in its name and behalf by its proper officers, thereunto duly authorized, and
Employee has set his hand as of the date first above written.

EMPLOYEE'S NAME                             RESOURCE BANK

___________________________________         By:  _______________________________
Signature                                            T. A. Grell, Jr.

James M. Miller                             Its:     President
-----------------------------------              -------------------------------
Printed Name

Date:______________________________         Date _______________________________

                                       8

<PAGE>

                                  SUMMARY SHEET

                                 James M. Miller

     During Employee's employment with Resource pursuant to the terms and
conditions of this Agreement, Employee shall be entitled to the following
additional benefits:

     1. Employee will participate in Resource's Senior Executive Retirement Plan
("SERP"), pursuant to which Employee will be eligible to receive a retirement
benefit of $50,000 per year for ten (10) years following Employee's retirement
from Resource. The SERP benefit (i) is contingent upon Employee being employed
by Resource for not less than ten (10) years, and (ii) will first be paid upon
the later of Employee's retirement from Resource or Employee reaching sixty-five
(65) years of age. Terms and conditions of this plan are in the plan document.

     2. Employee will be included in the supplemental disability insurance
program funded by the Bank for selected executives.

     3. Bank will pay dues and all business related expenses for Princess Anne
Country Club.

                                       9<PAGE>

                                  RESOURCE BANK

                          STOCK AND 401(k) SAVINGS PLAN

                              Amended and Restated

                            Effective January 1, 2001

<PAGE>

                   RESOURCE BANK STOCK AND 401(k) SAVINGS PLAN
                             As Amended and Restated
                            Effective January 1, 2001

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                            Page
<S>                                                                          <C>
ARTICLE I ...............................................................      2

   DEFINITIONS ..........................................................      2

   1.1 Account ..........................................................      2

   1.2 Administrator ....................................................      2

   1.3 Affiliate ........................................................      2

   1.4 Bank .............................................................      3

   1.5 Bankshares Stock .................................................      3

   1.6 Base Contribution ................................................      3

   1.7 Beneficiary ......................................................      3

   1.8 Board ............................................................      3

   1.9 Break in Service .................................................      3

   1.10 Cash Account ....................................................      3

   1.11 Code ............................................................      3

   1.12 Compensation ....................................................      3

   1.13 Disability ......................................................      4

   1.14 Effective Date ..................................................      4

   1.15 Employee ........................................................      4

   1.16 Employer ........................................................      4

   1.17 Entry Date ......................................................      4

   1.18 ERISA ...........................................................      4

   1.19 ESOP Account ....................................................      4

   1.20 ESOP Contribution ...............................................      4

   1.21 ESOP Loan .......................................................      4

   1.22 Financed Shares .................................................      4

   1.23 Highly Compensated Employee .....................................      4

   1.24 Hour of Service .................................................      5

   1.25 Investment Fund or Investment Funds .............................      6
</TABLE>

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<TABLE>
<S>                                                                          <C>
   1.26 Matched Account .................................................      6

   1.27 Matching Contributions ..........................................      6

   1.28 Named Fiduciary .................................................      6

   1.29 Normal Retirement Age ...........................................      6

   1.30 Participant .....................................................      6

   1.31 Payroll Savings Contributions ...................................      7

   1.32 Plan ............................................................      7

   1.33 Plan Year .......................................................      7

   1.34 Predecessor Institution .........................................      7

   1.35 Profit Sharing Account ..........................................      7

   1.36 Profit Sharing Contributions ....................................      7

   1.37 Retirement Date .................................................      7

   1.38 Rollover Account ................................................      7

   1.39 Savings Account .................................................      7

   1.40 Savings Agreement ...............................................      7

   1.41 Stock Account ...................................................      7

   1.42 Subsidiary ......................................................      7

   1.43 Trust ...........................................................      7

   1.44 Trustee .........................................................      8

   1.45 Valuation Date ..................................................      8

   1.46 Year of Service .................................................      8

   1.47 Top-Heavy Plan Definitions ......................................      9

ARTICLE II ..............................................................     10

   PARTICIPATION ........................................................     10

   2.1 Eligibility ......................................................     10

   2.2 Participation upon Reemployment ..................................     11

   2.3 Information to be Furnished Trustee and Administrator ............     11

   2.4 Additional Information ...........................................     11

   2.5 Leased Employees .................................................     11

ARTICLE III .............................................................     11

   EMPLOYER CONTRIBUTIONS ...............................................     11

   3.1 Employer Contributions ...........................................     11

   3.2 Form of Contributions ............................................     12

   3.3 No Employer Contributions Required ...............................     12
</TABLE>

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<TABLE>
<S>                                                                                      <C>
    3.4 Limitation on Employer Contributions ..........................................   12

    3.5 Return of Contributions .......................................................   12

ARTICLE IV ............................................................................   13

    PAYROLL SAVINGS AND ROLLOVER CONTRIBUTIONS ........................................   13

    4.1 Participant Savings ...........................................................   13

    4.2 Rules Governing Savings Agreements ............................................   14

    4.3 Antidiscrimination Requirements ...............................................   14

    4.4 Participant Rollover and Transfer Contributions ...............................   18

ARTICLE V .............................................................................   19

    ACCOUNTS AND ALLOCATIONS OF CONTRIBUTIONS AND FORFEITURES .........................   19

    5.1 Accounts ......................................................................   19

    5.2 Release of Financed Shares ....................................................   20

    5.3 Matching Contributions ........................................................   21

    5.4 Allocation of ESOP and Profit Sharing Contributions and Forfeitures ...........   21

    5.5 Limits on Allocation of Bankshares Stock to Selling Shareholders
        in Section 1042 Transaction ...................................................   21

    5.6 Limits on Matching Contributions to Satisfy Code (S) 401(m)
        Antidiscrimination ............................................................   22

    5.7 Maximum Annual Addition .......................................................   26

 ARTICLE VI ...........................................................................   28

    VALUATION, PARTICIPANT INVESTMENT ELECTIONS AND VOTING RIGHTS .....................   28

    6.1 Year-End Valuation of ESOP Assets .............................................   28

    6.2 Daily Valuation of Investment Funds ...........................................   30

    6.3 Participant Right to Direct Trustee to Diversify Stock Account ................   30

    6.4 Voting Rights for Stock Accounts ..............................................   30

    6.5 Participant Direction of Savings, Matched (Pre-April 1, 2000), Profit
        Sharing and Rollover Accounts .................................................   30

ARTICLE VII ...........................................................................   33

    Distribution of Benefits ..........................................................   33

    7.1 General Procedure .............................................................   33

    7.2 Normal Retirement .............................................................   33

    7.3 Late Retirement ...............................................................   33

    7.4 Disability ....................................................................   33

    7.5 Death of Participant ..........................................................   33

    7.6 Severance of Employment .......................................................   34
</TABLE>

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<PAGE>

<TABLE>
<S>                                                                                                    <C>
      7.7 Commencement of Distributions ............................................................   34

      7.8 Valuation and Time of Payment for Terminated Participants ................................   35

      7.9 Valuation and Time of Payment for Retiring, Disabled or Deceased Participants ............   35

      7.10 Death of a Former Participant ...........................................................   36

      7.11 Loans to Participants ...................................................................   36

      7.12 Hardship Distributions ..................................................................   36

ARTICLE VIII .......................................................................................   38

      FORM OF PAYMENT ..............................................................................   38

      8.1 Normal Form ..............................................................................   38

      8.2 Payment in Event of Death ................................................................   38

      8.3 Optional Forms of Payment ................................................................   39

      8.4 Multiple Beneficiary Designation .........................................................   40

      8.5 Distributions of Bankshares Stock ........................................................   40

      8.6 Participant Right to Direct Rollover .....................................................   41

ARTICLE IX .........................................................................................   42

      RIGHTS OF EMPLOYER ...........................................................................   42

      9.1 Right of Termination .....................................................................   42

      9.2 Right of Amendment .......................................................................   43

      9.3 Distribution of Funds Upon Termination ...................................................   43

      9.4 No Contributions After Termination .......................................................   43

ARTICLE X ..........................................................................................   44

      ADMINISTRATION ...............................................................................   44

      10.1 Administrator ...........................................................................   44

      10.2 Authority and Responsibilities of Administrator .........................................   44

      10.3 Named Fiduciary .........................................................................   44

      10.4 Allocation and Delegation ...............................................................   44

      10.5 Agents of the Administrator .............................................................   44

      10.6 Indemnity ...............................................................................   44

      10.7 Actions of the Administrator and Named Fiduciaries ......................................   44

      10.8 Disputed Questions ......................................................................   45

      10.9 Benefit Claims Procedures ...............................................................   45

      10.10 Actions of the Administrator ...........................................................   45

      10.11 Reliance on Reports and Certificates ...................................................   45

      10.12 Compensation ...........................................................................   45
</TABLE>

                                       iv

<PAGE>

<TABLE>
<S>                                                                        <C>
    10.13 Service of Process ............................................  45

ARTICLE XI ..............................................................  46

    AUTHORITY AND POWERS OF THE TRUSTEE .................................  46

    11.1 Relationship with Third Parties ................................  46

    11.2 Accounting .....................................................  46

    11.3 Compensation ...................................................  46

    11.4 Powers and Duties of the Trustee ...............................  46

    11.5 ESOP Loans .....................................................  49

    11.6 Removal of Trustee .............................................  49

    11.7 Acting for the Trustee .........................................  50

    11.8 Expenses of Trust ..............................................  50

    11.9 Investment Manager .............................................  50

ARTICLE XII .............................................................  50

    PROVISIONS RELATING TO TOP-HEAVY PLAN ...............................  50

ARTICLE XIII ............................................................  51

    MISCELLANEOUS PROVISIONS ............................................  51

    13.1 No Guarantee of Employment .....................................  51

    13.2 Severability ...................................................  51

    13.3 No Right of Action By Reason of Plan ...........................  51

    13.4 Non-Alienation of Benefits .....................................  52

    13.5 Qualified Domestic Relations Orders ............................  52

    13.6 Evidence of Survival ...........................................  52

    13.7 Action By or For Employer ......................................  53

    13.8 Adoption of Plan by Related Entities ...........................  53

    13.9 Non-Diversion of Trust Funds ...................................  53

    13.10 Payment to Minors and Incompetents ............................  53

    13.11 Merger ........................................................  53

    13.12 Plan Not Effective Unless Approved ............................  54

    13.13 Use of Pronouns ...............................................  54

    13.14 Governing Law .................................................  54
</TABLE>

                                       v

<PAGE>

         THIS AGREEMENT, made in the City of Virginia Beach, Virginia, this ___
day of February, 2002, by and between RESOURCE BANK, a Virginia banking
corporation (the "Bank"), and SECURITY TRUST COMPANY (the "Trustee");

         WHEREAS, the Bank initially adopted the Virginia Bankers Association
Defined Contribution Plan for Resource Bank (the "Plan") effective January 1,
1993, for the benefit of its eligible employees and pursuant thereto created a
trust (the "Trust") for the purpose of investing and administering the
contributions made to the Plan, such that the Plan met the qualification
requirements of (S) 401(a) and the Trust was tax-exempt under (S) 501 of the
Internal Revenue Code of 1986 (the "Code"); and

         WHEREAS, the Plan was first amended to add a 401(k) salary deferral
feature effective August 1, 1993; and, after the Bank was reorganized to become
the wholly owned subsidiary of Resource Bankshares Corporation, the Plan was
restated in its entirety effective July 1, 1998, utilizing a master plan
document sponsored by Virginia Bankers Association; and

         WHEREAS, effective April 1, 2000, the Plan was amended to provide that
all further Matching contributions to Participants would be made to the Plan in
the form of Company Stock; and

         WHEREAS, effective October 1, 2000, the Plan was amended further and
was restated as an individually designed plan, which amendment and restatement
reflected that (i) the Plan had moved from the Virginia Bankers Association
Master Defined Contribution Plan and Trust (Basic Plan Document No. 3, June
1996), and its accompanying Profit Sharing Thrift Plan With Employer Stock
Investment Adoption Agreement (Number 001) to an individually designed plan
document, (ii) the individually designed Plan was renamed the "Resource Bank
Stock and 401(k) Savings Plan," (iii) the Plan's Trustee changed from the
Virginia Bankers Association Benefits Corporation to Eleanor C. Whitehurst and
Debra J. Dyckman, (iv) the vesting schedule was changed to a 2-year cliff
vesting schedule, (v) in addition to any other categories of ineligible
employees, temporary and seasonal employees hired to work a fixed period of 6
months or less are not eligible to participate in the Plan, (vi) the Plan would
provide for an adjusted matching contribution to reflect the fact that
operationally, Participant's Matching Contributions may be lower when Matching
Contributions are allocated on a payroll (rather than annual) basis and are not
adjusted at the end of the Plan Year to reflect any additional Matching
Contributions to which the Participant's are entitled based on an allocation
calculation performed on an annual basis, and (vii) an employee stock ownership
plan feature was added to the Plan, although as of January 1, 2002, no ESOP
contributions had been made or planned; and

         WHEREAS, effective as of October 1, 2001, the Trustee was changed to
Security Trust Company; and

         WHEREAS, effective January 1, 2002, the Plan was amended (but not
restated) in good faith to incorporate changes permitted by the Economic Growth
and Tax Relief Reconciliation Act of 2001 (EGTRRA). That amendment affected (i)
involuntary cashouts from the Plan, (ii) hardship distributions, (iii) catch-up
contributions (and Matching contributions thereon), (iv) the

                                        1

<PAGE>

Plan's compensation limit, (v) the limitations on a Participant's annual
additions, (vi) the Plan's top heavy rules, (vii) direct rollovers out of the
Plan, (viii) rollovers into the Plan, (ix) the nondiscrimination testing for
401(k) plans (specifically, removing the multiple-use test), and (x)
distributions upon a Participant's severance of employment with any
Participating Employer; and

         WHEREAS, Section 9.2 of the Plan permits the plan sponsor, Resource
Bank, to amend the Plan, and Resource Bank now desires to do so, effective
January 1, 2001, to incorporate prior amendments and to comply with the current
tax laws and regulations and recent legislative changes, commonly referred to as
"GUST," which include changes made to federal pension law by the Uruguay Round
Agreements Act, the Uniformed Services Employment and Reemployment Rights Act of
1994, the Small Business Job Protection Act of 1996, the Taxpayer Relief Act of
1997, the Internal Revenue Service Restructuring and Reform Act of 1998, and the
Community Renewal Tax Relief Act of 2000

         NOW, THEREFORE, Resource Bank hereby adopts the Plan, as amended and
restated, effective January 1, 2001; and the Trustee covenants and agrees to
hold the property now in the Trust and any and all other property which he may
receive as Trustee hereunder, from time to time, in trust for the uses and
purposes and upon the terms and conditions hereinafter stated.

                                    ARTICLE I

                                   DEFINITIONS

         Unless the context or plan language requires otherwise, the following
terms shall have the meanings indicated:

1.1      "Account" means, with respect to a Participant, the aggregation of
accounts maintained to define such Participant's interest in the Trust. A
Participant's Account may include his Savings Account, Matched Account (which
may be further divided between pre-April 1, 2000, Matching Contributions and
post-March 31, 2000, Matching Contributions), Profit Sharing Account, ESOP
Account, and Rollover Account.

         Any shares of Bankshares Stock allocable to a Participant's Account
shall be credited to separate stock subaccounts within such Participant's ESOP
or post-March 31, 2000, Matched Account, as applicable. If more than one class
of stock is credited to a Participant's Account, a separate stock subaccount
shall be maintained to reflect contributions, allocations and forfeitures within
each such class of stock.

1.2      "Administrator" means the Administrator appointed pursuant to Article
X.

1.3      "Affiliate" means a corporation and/or trade or business which is under
common control or is aggregated with the Employer under the provisions of (S)(S)
414(b), (c) or (m) of the Code; provided, however, that for purposes of
Paragraph 5.7 only, "Affiliate" shall be determined under the provisions of Code
(S) 414, as modified by Code (S) 415(h).

                                        2

<PAGE>

1.4      "Bank" means Resource Bank.

1.5      "Bankshares Stock" means shares of capital stock issued by Resource
Bankshares Corporation, which shares are voting common stock (or preferred stock
convertible into voting common stock) and are "employer securities" as defined
in Code (S) 409(l).

1.6      "Base Contribution" means the amount contributed by the Employer for a
Plan Year, if any, defined as "Qualified Non-elective Contribution" under
Paragraph 4.3(e) and "Qualified Matching Contribution" under Paragraph 5.6(e),
in order to facilitate the Plan's compliance with the non-discrimination
requirements of Code (S)(S) 401(k) and 401(m), as declared by the Board in its
sole discretion.

1.7      "Beneficiary" means the person or persons entitled to receive any
amount under this Plan in the event of the death of a Participant or former
Participant.

1.8      "Board" means the Board of Directors of the Bank.

1.9      "Break in Service" means a Plan Year in which an Employee does not
complete more than 500 Hours of Service.

1.10     "Cash Account" means the portion of a Participant's ESOP Account that
reflects his interest in the ESOP Account attributable to Trust assets other
than Bankshares Stock.

1.11     "Code" means the Internal Revenue Code of 1986, as amended from time to
time. All statutory references in the Plan are to the Code unless otherwise
specified.

1.12     "Compensation" means, for any Plan Year, the first $170,000 (as
adjusted by the Internal Revenue Service from time to time for changes in the
cost of living) in wages or salaries paid by the Employer to a Participant for
services rendered during the Plan Year, including Payroll Savings Contributions
under this Plan and pre-tax salary reduction contributions made to a (S) 125
cafeteria or a (S) 132(f)(4) qualified transportation fringe benefit plan of the
Bank, if any.

         In addition, for purposes of the ESOP provisions, the term Compensation
includes overtime pay and commission payments, but excludes bonuses and all
other supplemental payments, reimbursements or other supplemental payments or
employer-provided benefits (other than Payroll Savings Contributions and pre-tax
salary deferrals made to a (S) 125 cafeteria plan, if any) under this or any
other employee benefit plan.

         In addition, for purposes of the Payroll Savings provisions, the term
Compensation includes overtime pay, bonuses, commission payments, expense
reimbursements and any other supplemental payments.

         Effective for Plan Years beginning after December 31, 1996, the family
aggregation rules of Code (S)401(a)(17)(A) (as in effect for Plan Years
beginning before January 1, 1997) shall no longer be applied in determining the
Compensation limit set forth in this definition.

                                        3

<PAGE>

1.13     "Disability" means a mental and/or physical condition which renders an
Employee incapable of performing the work he was performing for an Employer at
the time his disability began and for which he is receiving social security
disability payments.

1.14     "Effective Date" means January 1, 2001, the effective date of this
amended and restated Plan and Trust, except as otherwise provided herein, in
resolutions of the Board, or as required by applicable law.

1.15     "Employee" means any person who is employed by the Employer, excluding
(i) any person who is represented by a collective bargaining unit for the
purpose of bargaining with the Employer with respect to retirement benefits,
unless the resulting bargaining agreement provides for participation in the
Plan, (ii) any person employed in a position described by the Employer in its
payroll and/or personnel policies as "temporary" or "seasonal," and (iii) any
leased employee or other individual performing services for the Employer who is
not a common-law employee of the Employer.

1.16     "Employer" means the Bank or any subsidiary or related organization
that, with the consent of the Bank, adopts this Plan.

1.17     "Entry Date" means the date of hire of an Employee, other than an
employee who does not meet the definitional requirements set forth in Paragraph
1.15 for treatment as an "Employee"; such individuals, if they are common-law
employees of the Bank, shall become Participants in this Plan on the date they
are transferred to a job classification meeting the definitional requirements of
"Employee," as set forth in Paragraph 1.15.

1.18     "ERISA" means the Employee Retirement Income Security Act of 1974.

1.19     "ESOP Account" means the Account maintained by the Administrator to
reflect a Participant's interest in the Trust created by ESOP Contributions made
by the Bank.

1.20     "ESOP Contribution" means shares of Bankshares Stock or cash
contributed by the Bank for the purpose of acquiring shares of Bankshares Stock,
pursuant to the ESOP provisions of the Plan.

1.21     "ESOP Loan" means a loan (or other extension of credit) used by the
Trust to finance the acquisition of Bankshares Stock, which loan may constitute
an extension of credit to the Trust from a party in interest or disqualified
person (as defined in the Employee Retirement Income Security Act of 1974 or the
Code).

1.22     "Financed Shares" mean shares of Bankshares Stock acquired by the Trust
with the proceeds of an ESOP Loan.

1.23     "Highly Compensated Employee" means any Employee who:

         (a)    was a five percent (5%) or more owner of an Employer, as defined
in Code (S) 416(i)(1)(A)(iii), at any time during the current or preceding Plan
Year; or

                                        4

<PAGE>

       (b)   had Compensation from the Employer for the preceding Plan Year in
excess of $85,000, as periodically adjusted by the Internal Revenue Service for
increases in the cost of living, and, if the Employer elects the application of
this clause for such preceding year, was in the top-paid group of employees for
such preceding year.

             An employee is in the "top-paid" group of employees for any year if
such employee is in the group consisting of the top 20 percent of the employees
when ranked on the basis of compensation paid during such year.

             Effective for Plan Years beginning after December 31, 1996, the
term "Highly Compensated Employee," as defined herein above, shall have the
meaning given such phrase by Code (S) 414(q) and applicable Treasury Regulations
issued thereunder.

             Effective for plan years beginning after December 31, 1996, the
family aggregation rules of former Code (S) 414(q)(6) (as in effect for plan
years beginning before January 1, 1997) shall no longer be applied in for
purposes of this paragraph.

1.24   "Hour of Service" means:

       (a)   (1)  Each hour for which an Employee is paid, or entitled to
payment, by an Employer for the performance of duties during the Plan Year.
These hours shall be credited to the Employee for the Plan Year in which the
duties were performed; and

             (2)  Each hour for which an Employee is paid, or entitled to
payment, by an Employer for reasons other than for the performance of duties
during the Plan Year (irrespective of whether the employment relationship has
terminated) due to vacation, holiday, illness, incapacity (including
disability), layoff, jury duty, or leave of absence. These hours shall be
credited to the Employee for the Plan Year in which the period during which no
duties were performed occurred.

             (3)  Each hour not credited under subparagraph (a)(1) or (a)(2) for
which back pay, irrespective of mitigation of damages, is either awarded or
agreed to by the Employer. These hours shall be credited to the Employee for the
Plan Year to which the award or agreement pertains rather than the Plan Year in
which the award, agreement or payment is made.

             (4)  Each hour, not in excess of 501, for which an Employee would
otherwise have received credit but for a Parental Leave.

                  (i)    These hours shall be credited in the Plan Year in which
the Parental Leave commenced if necessary to avoid a Break in Service in such
Plan Year.

                  (ii)   If hours are not credited under clause (i) above, they
shall be credited in the Plan Year next following the commencement of such
Parental Leave, if necessary to avoid a Break in Service in such Plan Year.

                  (iii)  In any case in which the Administrator cannot determine
the Hours of Service the Employee would otherwise have been credited but for
such absence, the Employee shall be credited with eight (8) Hours of Service per
day of such absence.

                                        5

<PAGE>

                      (iv)    The term  "Parental  Leave"  means  absence  from
work by a mother or father on account of: (1) the pregnancy of the Employee; (2)
the birth of a child of the Employee; (3) the placement of a child with the
Employee in connection with such child's adoption by the Employee; or (4) the
caring for such child for a period beginning immediately following such birth or
placement. The Employee shall furnish such information as the Administrator may
require establishing that the reasons and length of the absence comply with (1)
through (4) above.

       (b)   No more than 501 hours shall be credited under subparagraphs
(a)(2), (a)(3) or (a)(4) for any single continuous period during which the
Employee performs no duties (whether or not such period occurs in a single Plan
Year).

       (c)   An Employee shall be credited with 40 Hours of Service for each
week that the Employee is on an authorized leave of absence due to service in
the Armed Forces of the United States, provided that the Employee complies with
all of the requirements of Federal law in order to be entitled to reemployment
and provided further that the Employee returns to employment with the Employer
within the period provided by such law.

       (d)   An exempt Employee shall be credited with 40 Hours of Service for
each week he performs one Hour of Service, and 870 such hours shall be the
equivalent of 1,000 and 435 such hours shall be the equivalent of 500. For the
purpose of this subparagraph, an exempt Employee is an Employee for whom hourly
pay records are not required to be kept under the federal wage and hour laws,
and for whom such records are not kept.

       (e)   Pursuant to Labor Department Reg. (S) 2530.200b-2(f), the rules set
forth in Reg. (S) 2530.200b-2(b) and (c) for computing Hours of Service are
hereby incorporated by reference.

1.25   "Investment Fund" or "Investment Funds" means the Funds selected by the
Administrator pursuant to Article VI as the investment vehicles for Plan assets.

1.26   "Matched Account" means the portion of a Participant's Account which
reflects his interest in such Account attributable to Matching Contributions.

1.27   "Matching Contributions" means the amount contributed by the Employer for
a Plan Year, if any, to match a percentage of the Payroll Savings Contributions
by each Participant during such Plan Year, as declared by the Board in its sole
discretion. As of April 1, 2000 the Matching Contribution shall be funded with
shares of Bankshares Stock.

1.28   "Named Fiduciary" means those persons appointed or designated as such
pursuant to the provisions of Article X.

1.29   "Normal Retirement Age" means the Participant's attainment of the age of
sixty-five (65) years.

1.30   "Participant" means any Employee who, at the time of reference, is
qualified to participate in the benefits of the Plan, and where the context
requires, or it is specifically provided, it shall include a former Participant.

                                        6

<PAGE>

1.31   "Payroll Savings Contributions" means the amounts contributed by the
Employer to the Plan on behalf of a Participant, pursuant to the Participant's
Savings Agreement, as described in Paragraph 4.1.

1.32   "Plan" means the Resource Bank Stock and 401(k) Savings Plan.

1.33   "Plan Year" means a period of twelve (12) consecutive months commencing
on January 1/st/ and ending on the following December 31/st/, which period shall
be the computation period for participation, vesting and benefit accrual
purposes and the limitation year for purposes of Code (S) 415.

1.34   "Predecessor Institution" means any business entity all (or substantially
all) of the assets of which shall have been or shall be purchased by any
Employer (or any Predecessor Institution as herein defined) or which has been or
shall be merged or consolidated with any Employer (or any Predecessor
Institution as herein defined).

1.35   "Profit Sharing Account" means the account maintained by the
Administrator to reflect a Participant's interest in the Trust created by Profit
Sharing Contributions, if any.

1.36   "Profit Sharing Contributions" means amounts contributed by the Employer
to the Plan on behalf of a Participant as profit sharing, as declared by the
Board in its sole discretion.

1.37   "Retirement Date" of a Participant means the first day of the month
coincident with or next following his actual retirement under the Plan.

1.38   "Rollover Account" means the account maintained by the Administrator to
reflect a Participant's interest in the Trust created by his own rollover or
transfer contributions from a conduit IRA or a qualified plan sponsored by a
prior employer.

1.39   "Savings Account" means the account maintained by the Administrator to
reflect the Participant's interest in the Trust created by his Payroll Savings
Contributions.

1.40   "Savings Agreement" means the written agreement entered into between the
Participant and the Employer pursuant to Paragraph 4.1 by which the Participant
agrees to reduce his taxable Compensation and the Employer agrees to make an
equivalent Payroll Savings Contribution to the Plan on his behalf.

1.41   "Stock Account" means the portion of a Participant's ESOP Account
consisting of Bankshares Stock.

1.42   "Subsidiary" means any corporation all or the majority of whose issued
and outstanding capital stock is owned by the Bank, either directly or through
one or more other Subsidiaries.

1.43   "Trust" means the trust which is hereby continued under this amended and
restated Plan by agreement between the Bank and the Trustee, whether such trust
is set forth under the provisions of Article XI or in a separate trust agreement
required by the Trustee, and which shall be known as the Resource Bank Stock and
401(k) Savings Plan Trust. If a separate trust agreement is required by the
Trustee, the provisions of Article XI shall not apply and the operative trust
agreement will be the

                                        7

<PAGE>

separate trust agreement and all references in this Plan document to the Trust
shall refer to such separate agreement.

1.44   "Trustee" means the person or persons who execute this Plan as trustee or
any successor or successors thereto, or, if the Trustee requires a separate
trust agreement, the person or persons who execute that separate agreement as
Trustee.

1.45   "Valuation Date" means every business day during each Plan Year;
provided, however, that any asset of the Trust which is not actually valued on a
daily basis shall be valued at least once per Plan Year on the last day of the
Plan Year and shall be deemed to have, as of such date, the value assigned to it
by the qualified, independent appraiser retained for the purpose of valuing such
assets.

1.46   "Year of Service" means:

       (a)   (1)  Eligibility. Because each Employee is eligible to participate
in the Plan immediately upon commencement of employment with the Employer, there
is no Years of Service calculation for eligibility purposes.

             (2)  Breaks in Service for Nonvested Participants. Years of Service
of a nonvested Participant shall be disregarded for all purposes if he has
consecutive Breaks in Service that equal or exceed the greater of five (5) or
the number of Years of Service before the first Break in Service.

       (b)   (1)  Vesting. For purposes of computing an Employee's
nonforfeitable percentage (i.e., his vested interest) in his Account pursuant to
Paragraph 7.6, he shall be credited with a Vesting Year of Service for each Plan
Year beginning on or after the Effective date in which he completes at least
1,000 Hours of Service. Service of any leased employee with the Employer or
attributable to any employer aggregated with the Employer under Code (S)(S)
414(b), (c) or (m) will be credited for vesting purposes regardless of that
leased employee's eligibility to participate in the Plan.

             (2)  Past Service Vesting Credit. An Employee shall be credited
with one (1) Vesting Year of Service hereunder for each Year of Service he had
earned under the provisions of the Plan. For purposes of the preceding sentence,
the term Year of Service means a Plan Year beginning on January 1, 1993, in
which an Employee completed at least 1,000 Hours of Service.

             (3)  Breaks in Vesting Service. Years of Service after five (5)
consecutive Breaks in Service shall not be taken into account for purposes of
computing the vested interest of the Participant in his Account, under Paragraph
7.6, which accrued before the first such Break in Service.

             (4)  Post-Break Vesting. For purposes of computing a rehired
Participant's vested interest in his Account which accrues after his date of
reemployment, he shall receive credit for all of his Years of Service prior to a
Break in Service if, on the date (a) he previously terminated employment, he had
a vested interest in any portion of his Account, or (b) he is reemployed, his
service could not be disregarded under subparagraph (a)(2) above.

                                        8

<PAGE>

             (5)  No Double Vesting. No Employee shall receive vesting credit
for more than one Year of Service with respect to any one Plan Year, whether
simultaneously employed by two or more Employers or employed by one or more
Employers for portions of a Plan Year.

       (c)   Service with Affiliates, Predecessor Institutions, and Contracted
Entities.

             (1)  An Employee shall receive Years of Service eligibility and
vesting credit for all service with an affiliated employer. For the purpose of
this paragraph, "affiliated employer" means any organization which was, at the
time such services were performed, related to the Bank as: (i) a member of the
same controlled group of corporations (as defined in Code (S) 414(b)); (ii) a
trade or business under the same common control (as defined in Code (S) 414(c));
or (iii) a member of the same affiliated service group (as defined in Code (S)
414(m)).

             (2)  Service with a Predecessor Institution shall be considered
service for vesting purposes with an Employer if such Predecessor Institution
maintained a qualified retirement plan that is continued in conjunction with or
as part of this Plan. Other service with a Predecessor Institution may be
considered service with an Employer as determined by the Board with respect to
the employees of a particular predecessor institution and shall be treated as
service with the Employer to the extent required by law.

1.47   Top-Heavy Plan Definitions.  The definitions relating to top-heavy plan
provisions are as follows:

       (a)   A plan is a "top-heavy plan" if, as of the determination date, the
aggregate of the accounts of key employees under the Plan exceeds sixty percent
(60%) of the aggregate of the accounts of all Employees under such Plan. The
determination of whether the Plan is top-heavy shall be made after aggregating
all other plans of the Employer in which a key employee participates, including
any terminated plan, and any other plan of an Employer which enables this Plan
to meet the requirements of Code (S)(S) 401(a)(4) and 410 with this Plan (the
"required aggregation group"). In addition, any other plan of an Employer which,
when considered as a group with the required aggregation group, would satisfy
the requirements of Code (S)(S) 401(a)(4) and 410 (the "permissive aggregation
group") shall be aggregated with this Plan if such permissive aggregation
thereby eliminates the top-heavy status of any plan within such permissive
aggregation group. A plan is a "super top-heavy plan" if, as of the
determination date, the plan would meet the test specified above for being a
top-heavy plan if ninety percent (90%) were substituted for sixty percent (60%)
in each place it appears in this subparagraph.

       (b)   The "determination date" for purposes of determining whether a plan
is top-heavy for a particular Plan Year is the last day of the preceding Plan
Year or, in the case of the first Plan Year, the last day of such Plan Year.

       (c)   The "valuation date" for purposes of determining the value of Plan
accounts under this section shall be the same date as the determination date.

       (d)   A "key employee" is any Employee (including a Beneficiary of such
Employee or a former Employee) who performed service at any time during the Plan
Year or any of the four preceding Plan Years and is:

                                        9

<PAGE>

          (1) An officer of the Employer having an annual compensation greater
than 50 percent of the amount in effect under Code (S) 415(b)(1)(A) for any such
Plan Years (but in no event shall more than fifty (50) Employees or, if less,
the greater of three (3) or ten percent (10%) of all Employees be taken into
account under this subparagraph (d)(1) as key employees);

          (2) One of the ten (10) Employees having annual Compensation from the
Employer greater than the limitation in effect under Code (S) 415(c)(1)(A) and
owning (or considered as owning within the meaning of Code (S) 318) the largest
interest of the Employer (but if two (2) or more Employees have the same
interest in the Employer, the Employee having the greater annual compensation
from the Employer shall be treated as having the larger interest);

          (3) A person owning (or considered as owning within the meaning of
Code (S) 318) more than five percent (5%) of the outstanding stock of the
Employer or stock possessing more than five percent (5%) of the total combined
voting power of all stock of the Employer; or

          (4) A person who has an annual compensation from the Employer of more
than One Hundred Fifty Thousand Dollars ($150,000) and who would be described in
subparagraph (3) hereof if one percent (1%) were substituted for five percent
(5%).

          For purposes of applying Code (S) 318 to the provisions of this
subparagraph, subparagraph C of Code (S) 318(a)(2) shall be applied by
substituting five percent (5%) for fifty percent (50%). In addition, the rules
of subsections (b), (c) and (m) of Code (S) 414 shall not apply for purposes of
determining ownership in the Employer under this subparagraph.

     (e)  A "non-key employee" is any Participant in the Plan (including a
Beneficiary of such Participant) who is not a key employee.

     (f)  Determinations as to which employees are key employees, the
aggregation of plans for top-heavy testing, and the computation of top-heavy
ratios shall be made in accordance with Code (S) 416 and Treas. Reg.(S) 1.416-1.

                                   ARTICLE II

                                  PARTICIPATION

2.1  Eligibility.
     -----------

     (a)  On January 1, 2001. Every Employee who was a Participant in the Plan
on January 1, 2001, shall continue to participate in this Plan on and after such
date.

     (b)  After January 1, 2001. Every Employee who was not a Participant in the
Plan on January 1, 2001, shall become a Participant in this Plan on the Entry
Date coinciding with the commencement of such Employee's employment with the
Employer.

                                       10

<PAGE>

2.2  Participation upon Reemployment. If a former Participant terminates
employment and is subsequently rehired, he shall once again become a Participant
hereunder on his date of reemployment.

2.3  Information to be Furnished Trustee and Administrator. With respect to its
Employees, the Employer shall furnish to the Trustee and to the Administrator,
within ninety (90) days after the end of each year, (a) a list of the
Participants who are actively employed or on leave of absence as of the last pay
period of such year and a list of the Participants who died, retired or
terminated their employment, showing, in each case, the aggregate amount of
Compensation paid or accrued to each of them during such year and the number of
Hours of Service completed by each such Participant, (b) a list of the other
Participants who incurred a Break in Service during the Plan Year, and (c) such
additional information (if any) as shall be necessary in order to enable the
Administrator to make proper allocation of any unallocated appreciation or
depreciation of the Trust assets, gains or losses of the Trust, forfeited
accounts and the Employer's contributions for and during such year.

2.4  Additional Information. With respect to its Employees, the Employer shall
also give to the Trustee and the Administrator notice of the death, retirement
or other termination of employment of any Participant or of any other matter
affecting any Participant's participation under the Plan, stating all facts with
respect thereto which are material to the administration of the Plan.

2.5  Leased Employees. For purposes of applying either the percentage or the
fair cross-section tests of Code (S) 410(b)(1) to the Employees eligible to
participate in or covered by the Plan, any individual deemed to be an Employee
of the Employer pursuant to Code (S) 414(n), relating to leased employees, shall
be treated as an Employee of the Employer. No such leased employee shall be
eligible to participate or be covered by the Plan,however, unless such
participation or coverage is required in order to satisfy the requirements of
Code (S) 410.

                                   ARTICLE III

                             EMPLOYER CONTRIBUTIONS

3.1  Employer Contributions. Subject to all the conditions and provisions set
forth in the Plan, the Employer shall, for each Plan Year, contribute to the
Trust:

     (a)  all Payroll Savings Contributions;

     (b)  all Matching Contributions;

     (c)  all ESOP Contributions; and

     (d)  all Profit Sharing Contributions.

                                       11

<PAGE>

3.2  Form of Contributions. Profit Sharing Contributions for any Plan Year may
be paid in cash, shares of Bankshares Stock or such other properties as the
Board, in its absolute discretion, may determine. Shares of Bankshares Stock and
other property contributed to the Plan shall be valued at current fair market
value. Payroll Savings Contributions shall be paid in cash, and such
contributions may be invested by Participants in Bankshares Stock. ESOP
Contributions and all Matching Contributions shall, after April 1, 2000, be paid
in the form of Bankshares Stock or cash earmarked for the purchase of Bankshares
Stock.

3.3  No Employer Contributions Required. Notwithstanding anything in the Plan to
the contrary, the Employer may determine that no Matching, ESOP or Profit
Sharing Contribution shall be made by it for the Plan Year or that its
contribution for such year shall be in a greater or lesser amount than any prior
contribution. No contribution or contributions shall in any way (literally or
proportionately) be deemed a precedent in determining the amount of any
subsequent contribution.

3.4  Limitation on Employer Contributions. The sum paid to the Trustee by the
Employer for any one year shall in no event exceed the maximum amount deductible
from the income of the Employer for such year under Code ss. 404. All
contributions pursuant to Paragraph 3.1 shall be made within the time prescribed
by the Code, or regulations promulgated thereunder from time to time, for making
contributions which can be deducted for Federal income tax purposes.

3.5  Return of Contributions.

     (a)  Except as provided in subparagraphs (b), (c) and (d) of this
paragraph, and notwithstanding any other provision of the Plan and Trust, the
Employer irrevocably divests itself of any interest in any sums contributed by
it to the Trust, and it shall be impossible for any portion of the Trust to be
used for, or diverted to, any purpose other than the exclusive benefit of
Participants or their Beneficiaries.

     (b)  If a contribution by the Employer is conditioned upon qualification of
the Plan or any amendment thereto under Code (S) 401 and the Plan or amendment
does not so qualify, the contribution may be returned to the Employer within one
year of the date of denial of such qualification.

     (c)  If a contribution by the Employer is based upon a mistake of fact,
the contribution may be returned to the Employer within one year after the
payment of the contribution.

     (d)  If a contribution is conditioned on its tax deductibility by the
Employer and such contribution is subsequently determined to be nondeductible,
the contribution may be returned to the Employer within one year of the date it
is determined to be nondeductible.

                                       12

<PAGE>

                                   ARTICLE IV

                   PAYROLL SAVINGS AND ROLLOVER CONTRIBUTIONS

4.1  Participant Savings.

     (a)  Savings Agreements. A Participant who has satisfied the eligibility
conditions of Paragraph 2.1 and become a Participant in the Plan may enter into
a Savings Agreement with the Employer which will be effective as of the first
payroll period beginning within fifteen (15) days after the Savings Agreement is
filed with the Administrator, and which will be applicable, until amended or
terminated, to all subsequent payroll periods. The terms of such Savings
Agreement shall provide that the Participant agrees to accept a reduction in his
taxable Compensation equal to either (i) a whole percentage of such Compensation
between one percent (1%) and fifteen percent (15%), or (ii) a fixed dollar
amount which shall be not less than one percent (1%) nor more than fifteen
percent (15%) of the Participant's Compensation. In consideration of such
agreement, the Employer will contribute to the Participant's Savings Account an
amount equal to the total amount by which the Participant's taxable Compensation
was reduced pursuant to his Savings Agreement. If a Participant's Compensation
shall increase or decrease after his completion of a Savings Agreement, the
amount of his Payroll Savings Contribution shall be adjusted accordingly,
provided that the Participant may, if he so designates on his Savings Agreement,
limit his Payroll Savings Contribution percentage to a maximum dollar amount.
The Employer shall deposit all Savings Contributions with the Trustee as of the
earliest date on which such contributions can reasonably be segregated from the
Employer's general assets.

          (1)  Effective for Plan Years beginning after December 31,
2001, the term "ninety percent (90%)" shall be substituted in Paragraph 4.1(a),
above, wherever the term "fifteen percent (15%)" is used.

     (b)  Maximum Payroll Savings. Notwithstanding anything in Paragraph 4.1(a),
no Participant shall be permitted to make Payroll Savings Contributions during
any calendar year in excess of $10,500 (or such higher amount as is established
by the Secretary of the Treasury after annual adjustment for cost of living
increases). Payroll Savings Contributions in excess of the applicable dollar
limit under Code (S) 402(g) shall be distributed, together with income allocable
thereto, no later than April 15 to Participants who claim such excess amounts
for the preceding calendar year. The Participant's claim for such excess amounts
shall be in writing, shall be submitted to the Administrator no later than March
1, and shall specify the exact amount by which the Participant's Payroll Savings
Contributions, when added to amounts deferred by the Participant under other
plans, exceeds the limit imposed on the Participant by Code (S) 402(g) for the
year in which the deferral occurred. The excess amount distributed to the
Participant hereunder shall be adjusted for income and, if there is a loss
allocable to the excess amount, shall in no event be less than the lesser of the
balance in the Participant's Savings Account or the amount of his Payroll
Savings Contributions for the Plan Year. The amount of income or loss allocable
to excess Payroll Savings Contributions is determined by multiplying the total
amount of income or loss allocable to the Participant's Savings Account for the
Participant's taxable year by a fraction, the numerator of which is such
Participant's excess Payroll Savings Contributions for the year and the
denominator of which is the sum of (1) the Participant's Savings Account balance
as of the beginning of the taxable year plus (2) the Participant's Payroll
Savings Contributions for the taxable year.

                                       13

<PAGE>

4.2  Rules Governing Savings Agreements.  Any Savings Agreement shall be
governed by the following rules:

     (a)  A Savings Agreement shall apply to each payroll period during the
Plan Year in which it is in effect.

     (b)  A Participant may change his Savings Agreement, but not retroactively,
effective as of the first day of the quarter following receipt of a revised
Savings Agreement by the Administrator. By giving written notice, a Participant
may revoke his Savings Agreement at any time during the Plan Year, effective as
of the end of the quarter following receipt of such notice.

     (c)  The Employer may amend or revoke its Savings Agreement with any
Participant at any time, if the Employer determines that such revocation or
amendment is necessary to ensure that a Participant's Payroll Savings
Contributions for any Plan Year will not exceed any applicable limitations under
the Plan or the Code or to ensure that the antidiscrimination test of Paragraph
4.3 below is met for such Plan Year.

     (d)  If a Participant terminates employment, his final Payroll Savings
Contribution will be made on the payday immediately following his last day of
employment. The balance in the Participant's Savings Account shall be
distributed to the Participant in accordance with Article VII.

4.3  Antidiscrimination Requirements.

     (a)  Actual Deferral Percentage.

          Prior Year Testing: For Plan Years beginning after December 31, 1996,
the Actual Deferral Percentage ("ADP") for a Plan Year for Participants who are
Highly Compensated Employees for each Plan Year and the prior year's ADP for
Participants who were Non-Highly Compensated Employees for the prior Plan Year
must satisfy one of the following tests:

          (1)  The ADP for a Plan Year for Participants who are Highly
Compensated Employees for the Plan Year shall not exceed the prior year's ADP
for Participants who were Non-Highly Compensated Employees for the prior Plan
Year multiplied by 1.25; or

          (2)  The ADP for a Plan Year for Participants who are Highly
Compensated Employees for the Plan Year shall not exceed the prior year's ADP
for Participants who were Non-Highly Compensated Employees for the prior Plan
Year multiplied by 2.0, provided that the ADP for Participants who are Highly
Compensated Employees does not exceed the ADP for Participants who were
Non-Highly Compensated Employees in the prior Plan Year by more than 2
percentage points.

               For the first Plan Year the Plan permits any Participant to make
Elective Deferrals and this is not a successor plan, for purposes of the
foregoing tests, the prior year's Non-Highly Compensated Employees' ADP shall be
3 percent unless the Employer has elected to use the Plan Year's ADP for these
Participants.

          Current Year versus Prior Year Testing: If elected by the Employer,
the ADP tests in (1) and (2) above will be applied by comparing the current Plan
Year's ADP for Participants who

                                       14

<PAGE>

are Highly Compensated Employees with the current Plan Year's ADP for
Participants who are Non-Highly Compensated Employees. Once made, this election
can only be undone if the Plan meets the requirements for changing to Prior Year
Testing set forth in Notice 98-1 (or superseding guidance). For the 1997 Plan
Year, the Plan elected to use Prior Year Testing. For Plan Years beginning on or
after January 1, 1998, the Plan has used Current Year Testing and will continue
to do so unless and until the Plan is amended to reflect otherwise.

     (b)  Special Rules.

          (1)  A Participant is a Highly Compensated Employee for a particular
Plan Year if he or she meets the definition of a Highly Compensated Employee in
effect for that Plan Year. Similarly, a Participant is a Non-Highly Compensated
Employee for a particular Plan Year if he or she does not meet the definition of
a Highly Compensated Employee in effect for that Plan Year.

          (2)  The ADP for any Participant who is a Highly Compensated Employee
for the Plan Year and who is eligible to have Elective Deferrals (and Qualified
Non-elective Contributions or Qualified Matching Contributions, or both, if
treated as Elective Deferrals for purposes of the ADP test) allocated to his or
her accounts under two or more arrangements described in Code (S) 401(k), that
are maintained by the Employer, shall be determined as if such Elective
Deferrals (and, if applicable, such Qualified Non-elective Contributions or
Qualified Matching Contributions, or both) were made under a single arrangement.
If a Highly Compensated Employee participates in two or more cash or deferred
arrangements that have different Plan Years, all cash or deferred arrangements
ending with or within the same calendar year shall be treated as a single
arrangement. Notwithstanding the foregoing, certain plans shall be treated as
separate if mandatorily disaggregated under regulations under Code (S) 401(k).

          (3)  In the event that this Plan satisfies the requirements of Code
(S)(S)401(k), 401(a)(4) or 410(b) only if aggregated with one or more other
plans, or if one or more other plans satisfy the requirements of such sections
of the Code only if aggregated with this Plan, then this Paragraph shall be
applied by determining the ADP of employees as if all such plans were a single
plan. Any adjustments to the Non-Highly Compensated Employee ADP for the prior
year will be made in accordance with Notice 98-1 and any superseding guidance,
unless the Employer has elected to use the Current Year Testing method. Plans
may be aggregated in order to satisfy Code (S) 401(k) only if they have the same
Plan Year and use the same ADP testing method.

          (4)  For purposes of determining the ADP test, Elective Deferrals,
Qualified Non-elective Contributions and Qualified Matching Contributions must
be made before the end of the 12-month period immediately following the Plan
Year to which the contributions relate.

          (5)  The Employer shall maintain records sufficient to demonstrate
satisfaction of the ADP test and the amount of Qualified Non-elective
Contributions or Qualified Matching Contributions, or both, used in such test.

     (c)  Definitions.

          (1)  "Actual Deferral Percentage" shall mean, for a specified group of
Participants for a Plan Year, the average of the ratios (calculated separately
for each Participant in

                                       15

<PAGE>

such group) of (1) the amount of Employer contributions actually paid over to
the trust on behalf of such Participant for the Plan Year to (2) the
Participant's Compensation for such Plan Year. Employer contributions on behalf
of any Participant shall include: (i) any Elective Deferrals made pursuant to
the Participant's deferral election (including Excess Elective Deferrals of
Highly Compensated Employees), but excluding (a) Excess Elective Deferrals of
Non-Highly Compensated Employees that arise solely from Elective Deferrals made
under the Plan or plans of the Employer and (b) Elective Deferrals that are
taken into account in the Contribution Percentage test (provided the ADP test is
satisfied both with and without exclusion of these Elective Deferrals); and (ii)
if elected by the Employer, Qualified Non-elective Contributions and Qualified
Matching Contributions. For purposes of computing Actual Deferral Percentages,
an Employee who would be a Participant but for the failure to make Elective
Deferrals shall be treated as a Participant on whose behalf no Elective
Deferrals are made.

          (2) "Elective Deferrals" shall mean any Employer contributions made to
the Plan at the election of the Participant, in lieu of cash compensation, and
shall include contributions made pursuant to a salary reduction agreement or
other deferral mechanism. With respect to any taxable year, a Participant's
Elective Deferrals is the sum of all Employer contributions made on behalf of
such Participant pursuant to an election to defer under any qualified cash or
deferred arrangement ("CODA") described in Code (S) 401(k), any salary reduction
simplified employee pension described in Code (S) 408(k)(6), any SIMPLE IRA Plan
described in Code (S) 408(p), any eligible deferred compensation plan under Code
(S) 457, any plan described under Code (S) 501(c)(18), and any Employer
contributions made on behalf of a Participant for the purchase of an annuity
contract under Code (S) 403(b) pursuant to a salary reduction agreement.
Elective Deferrals shall not include any deferrals properly distributed as
excess annual additions.

          (3)  "Excess Contributions" shall mean, with respect to any Plan Year,
the excess of:

               (i)  The aggregate amount of Employer contributions actually
          taken into account in computing the ADP of Highly Compensated
          Employees for such Plan Year, over

               (ii) The maximum amount of such contributions permitted by the
          ADP test (determined by hypothetically reducing contributions made on
          behalf of Highly Compensated Employees in order of the ADPs, beginning
          with the highest of such percentages).

          (4)  "Excess Elective Deferrals" shall mean those Elective Deferrals
that are includible in a Participant's gross income under Code (S) 402(g) to the
extent such Participant's Elective Deferrals for a taxable year exceed the
dollar limitation under such Code section. Excess Elective Deferrals shall be
treated as annual additions under the Plan, unless such amounts are distributed
no later than the first April 15 following the close of the Participant's
taxable year.

     (d)  Distribution of Excess Contributions. For Plan Years beginning after
December 31, 1996, notwithstanding any other provision of the Plan, Excess
Contributions, plus any income and minus any loss allocable thereto, shall be
distributed no later than the last day of each Plan Year to Participants to
whose accounts such Excess Contributions were allocated for the preceding Plan
Year. Excess Contributions are allocated to the Highly Compensated Employees
with the largest

                                       16

<PAGE>

amounts of Employer contributions taken into account in calculating the ADP test
for the year in which the excess arose, beginning with the Highly Compensated
Employee with the largest amount of such Employer contributions and continuing
in descending order until all the Excess Contributions have been allocated. For
purposes of the preceding sentence, the "largest amount" is determined after
distribution of any Excess Contributions. If such excess amounts are distributed
more than 2 1/2 months after the last day of the Plan Year in which such excess
amounts arose, a 10-percent excise tax will be imposed on the Employer
maintaining the Plan with respect to such amounts. Excess Contributions shall be
treated as annual additions under the Plan.

          (1) Determination of Income or Loss: Excess Contributions shall be
adjusted for any income or loss up to the date of distribution. The income or
loss allocable to Excess Contributions allocated to each Participant is the sum
of: (i) income or loss allocable to the Participant's Elective Deferral account
(and, if applicable, the Qualified Non-elective Contribution account or the
Qualified Matching Contributions account, or both) for the Plan Year multiplied
by a fraction, the numerator of which is such Participant's Excess Contributions
for the year and the denominator is the Participant's account balance
attributable to Elective Deferrals (and Qualified Non-elective Contributions or
Qualified Matching Contributions, or both, if any of such contributions are
included in the ADP test) without regard to any income or loss occurring during
such Plan Year; and (ii) 10 percent of the amount determined under (i)
multiplied by the number of whole calendar months between the end of the Plan
Year and the date of distribution, counting the month of distribution if
distribution occurs after the 15/th/ of such month.

          (2) Accounting for Excess Contributions: Excess Contributions
allocated to a Participant shall be distributed from the Participant's Elective
Deferral account and Qualified Matching Contribution account (if applicable), in
proportion to the Participant's Elective Deferrals and Qualified Matching
Contributions (to the extent used in the ADP test) for the Plan Year. Excess
Contributions shall be distributed from the Participant's Qualified Non-elective
Contribution account only to the extent that such Excess Contributions exceed
the balance in the Participant's Elective Deferral account and Qualified
Matching Contribution account.

     (e)  Designation of Nonforfeitable Base Contributions. The Employer may
elect to make nonforfeitable base contributions, defined below as Qualified
Non-elective Contributions, under the Plan on behalf of Employees. In addition,
if the Employer has elected to use the Current Year Testing method, in lieu of
distributing Excess Contributions as provided in Paragraph 4.3(d) of the Plan,
or Excess Aggregate Contributions as provided in Paragraph 5.6(d) of the Plan,
and to the extent elected by the Employer, the Employer may make Qualified
Non-elective Contributions on behalf of Participants that are sufficient to
satisfy either the Actual Deferral Percentage test or the Average Contribution
Percentage test, or both.

          "Qualified Non-elective Contributions," for purposes of this Paragraph
4.3(e), shall mean contributions (other than Matching Contributions or Qualified
Matching Contributions) made by the Employer and allocated to Participants'
accounts that the Participants may not elect to receive in cash until
distributed from the Plan; that are nonforfeitable when made; and that are
distributable only in accordance with the distribution provisions that are
applicable to Elective Deferrals and Qualified Matching Contributions.

                                       17

<PAGE>

     (f)  The provisions of this section are effective for Plan Years beginning
after December 31, 1996.

4.4  Participant Rollover and Transfer Contributions.

     (a)  Subject to satisfaction of the requirements of subparagraph (d)
below, amounts may be rolled over or transferred from other retirement plans
qualified under Code (S) 401(a) or annuity plans qualified under Code (S) 403(a)
to this Plan, provided that the trust from which such funds are transferred or
rolled over permits the transfer or rollover to be made and the transfer or
rollover will not jeopardize the tax exempt status of this Plan or Trust or
create adverse tax consequences for the Employer. The amounts transferred or
rolled over shall be set up in a separate account herein referred to as
"Rollover Account." Such account shall be fully vested at all times and shall
not be subject to forfeiture for any reason.

     (b)  Amounts in a Participant's Rollover Account shall be held by the
Trustee pursuant to the provisions of this Plan, and such amounts shall not be
subject to forfeiture for any reason and may not be withdrawn by, or distributed
to the Participant, in whole or in part, except as provided in subparagraph (c)
below.

     (c)  At Normal Retirement Age, or such other date when the Participant or
his Beneficiary shall be entitled to receive benefits, the fair market value of
the Participant's Rollover Account shall be used to provide additional benefits
to the Participant in the normal form or such other optional method as the
Participant may elect pursuant to Article VIII.

     (d)  For purposes of this Paragraph, the term "amounts rolled over or
transferred from another qualified plan" shall mean (i) amounts transferred to
this Plan directly from the trustee of another qualified plan; (ii) lump sum
distributions received by an Employee from another qualified plan which are
eligible for tax-free rollover to a qualified plan and which are transferred by
the Employee to this Plan within sixty (60) days following his receipt thereof;
(iii) amounts transferred to this Plan from an individual retirement account,
provided that the individual retirement account has no assets other than assets
which (A) were previously distributed to the Employee by another qualified plan
as a lump sum distribution, (B) were eligible for tax-free rollover to a
qualified plan, and (C) were deposited in such individual retirement account
within sixty (60) days of receipt thereof and earnings on said assets ("conduit
individual retirement account"); and (iv) amounts distributed to the Employee
from a conduit individual retirement account meeting the requirements of clause
(iii) above, and transferred by the Employee to this Plan within sixty (60) days
of his receipt thereof from such conduit individual retirement account. No
transfer contribution from any plan subject to the qualified joint and survivor
annuity payment requirements of Code (S) 401(a)(11) shall be approved by the
Administrator or accepted by the Trustee unless the Participant, at the time of
the transfer (i) is not married or (ii) if married, has obtained appropriate and
timely spousal consent to waive the otherwise applicable survivor annuity form
of payment in a writing witnessed by a notary public or plan representative of
such transferor plan. Prior to accepting any transfer to which this Paragraph
applies, the Administrator may require the Employee to establish that the
amounts to be transferred to this Plan meet the requirements of this Paragraph
and may also require the Employee to provide an opinion of counsel satisfactory
to the Employer that the amounts to be transferred meet the requirements of this
Paragraph.

                                       18

<PAGE>

     (e)  An Employee, prior to satisfying the Plan's eligibility conditions
under Paragraph 2.1, may make a rollover or transfer contribution to the Trust
to the same extent and in the same manner as a Participant. If an Employee makes
a rollover or transfer contribution to the Trust prior to satisfying the Plan's
eligibility conditions under Paragraph 2.1, the Administrator and Trustee shall
treat the Employee as a Participant for all purposes of the Plan except the
Employee shall not be eligible to make Payroll Savings Contributions nor shall
he share in Employer Contributions or Participant forfeitures under the Plan
until he actually becomes a Participant in the Plan. If the Employee terminates
employment prior to becoming a Participant, the Trustee shall distribute his
Rollover Account to him in accordance with Articles VII and VIII.

                                    ARTICLE V

                           ACCOUNTS AND ALLOCATIONS OF
                          CONTRIBUTIONS AND FORFEITURES

5.1  Accounts.

     (a)  The Administrator shall establish and maintain a separate Account for
each Participant in the Plan. Each Account shall be comprised of an ESOP Account
(consisting of a Cash Account and a Stock Account), a Matched Account (which may
be further subdivided for Matching Contributions made before, and beginning on
or after, April 1, 2000), a Savings Account, and, if applicable, a Rollover
Account or a Profit Sharing Account. Except as provided below, such separate
accounts shall not require a segregation of trust assets, and no Participant
shall acquire any right to or interest in any specific asset as a result of the
allocations provided under the Plan.

     (b)  The ESOP Stock Account of each Participant will be credited as of each
Valuation Date with his allocable share of (a) Bankshares Stock (including
fractional shares) purchased and paid for by the Trustee, or contributed in kind
by the Employer, (b) forfeitures of Bankshares Stock, and (c) stock dividends on
Bankshares Stock held in his Stock Account. The ESOP Cash Account of each
Participant will be credited or debited as of each Valuation Date with its share
of Plan income or loss, with cash dividends paid on Bankshares Stock in his
Stock Account, and with ESOP Contributions and forfeitures of other than
Bankshares Stock. The Cash Account will be debited for any payments for
purchases of Bankshares Stock. The Participant's interest in his ESOP Account
shall be vested in accordance with Paragraph 7.6.

          (1) Cash dividends, if any, on shares of Bankshares Stock allocated to
Participants' ESOP Accounts may be accumulated in the Trust or may be paid to
Participants currently as determined in the sole discretion of the
Administrator, exercised in a uniform and nondiscriminatory manner. It is
intended that the Bank shall be allowed a deduction under Code (S) 404(k) with
respect to any dividends paid on allocated shares of Bankshares Stock of any
class held by the Plan on the record date to the extent such dividends are paid
in cash directly to the Participants, or their Beneficiaries, or are paid to the
Plan and are distributed from the Plan to the Participants or their
Beneficiaries not later than ninety (90) days after the close of the Plan Year
in which paid. It is also intended that the Bank be allowed a deduction under
Code (S) 404(k) for any dividends paid on shares of Bankshares Stock (whether or
not allocated) to the extent such

                                       19

<PAGE>

dividends are used to make payments on an ESOP Loan, provided that with respect
to dividends paid on allocated shares, shares of Bankshares Stock having a fair
market value at least equal to the amount of such dividends shall be allocated
to the Stock Accounts of Participants for the year in which such dividends would
otherwise have been allocated to such Participants.

     (c)  The Savings, Matched (accumulated prior to April 1, 2000), Rollover
and Profit Sharing Accounts of each Participant will be allocated among the
Investment Funds as directed by the Participant, in the manner set forth in
Paragraph 6.5. Each such Account will be credited or debited as of each
Valuation Date with its allocable share of income or loss and any contributions
made to such Account. Each Participant shall always be one hundred percent
(100%) vested in all amounts credited to his Savings and Rollover Accounts.

     (d)  The Rollover Account of a Participant, if any, shall represent his
interest in the Trust created by the rollover or transfer of amounts from other
retirement plans pursuant to Paragraph 4.4. The Rollover Account of a
Participant shall be credited or debited as of each Valuation Date with its
allocable share of Plan income or loss. The Rollover Account of a Participant
shall not share in any allocations of Employer contributions or Participant
forfeitures, and the Participant shall always be one hundred percent (100%)
vested in the amount credited to his Rollover Account.

     (e)  The Profit Sharing Account of a Participant, if any, shall represent
his interest in the Trust created by Profit Sharing Contributions, if any. The
Participant's interest in his Profit Sharing Account shall be vested in
accordance with Paragraph 7.6.

5.2  Release of Financed Shares. Financed Shares shall initially be credited to
a "Loan Suspense Account" and shall be allocated to the Stock Accounts of
Participants as the principal amount of the ESOP Loan is repaid, in accordance
with the following provisions:

     (a)  For each Plan Year until the ESOP Loan is fully repaid, the number of
Financed Shares released from the Loan Suspense Account shall equal the number
of unreleased Financed Shares immediately before such release for the current
Plan Year multiplied by a fraction, the numerator of which is the amount of
principal paid on the ESOP Loan for the current Plan Year and the denominator of
which is the sum of the numerator plus the principal to be paid on such ESOP
Loan for all future years during the term of the ESOP Loan (determined without
reference to any possible extensions or renewals thereof). Notwithstanding the
foregoing, in the event an ESOP Loan subject to this subparagraph 5.2(a) shall
be repaid with the proceeds of a subsequent ESOP Loan, the Financed Shares in
the Loan Suspense Account shall not be released by the repayment, but shall
continue to be released according to provisions of this subparagraph 5.2(a) on
the basis of payments of principal on such substitute loan; provided, however,
that the term of the original ESOP Loan and any extension, renewal or
refinancing of the original ESOP Loan shall not exceed ten (10) years.

     (b)  If at any time there is more than one ESOP Loan outstanding, then each
ESOP Loan shall be accounted for separately under the Loan Suspense Account and
shall be treated separately for purposes of the provisions governing the release
of shares under this Paragraph 5.2.

                                       20

<PAGE>

     (c)  All Financed Shares released from the Loan Suspense Account during any
Plan Year shall be held in the Trust Fund on an unallocated basis until
allocated by the Administrator as of the next succeeding Valuation Date under
Paragraph 5.4.

5.3  Matching Contributions. Subject to all the conditions and provisions set
forth in the Plan, the Employer shall, in its sole discretion, make Matching
Contributions to the Trust at the end of each Plan Year in an amount equal to
the percentage of each Participant's Payroll Savings Contribution for such Plan
Year set by the Board for such Plan Year, if any. Matching Contributions shall
be allocated to each Participant who made Payroll Savings Contributions to the
Plan during the Plan Year.

     Matching Contributions, if made, shall be initially allocated to the
Account of each Participant entitled to such Matching Contributions at the time
that Payroll Savings Contributions are made, but shall be adjusted, if
necessary, at the end of each Plan Year so that the amount of Matching
Contributions made to a Participant's Account are in an amount that is
consistent with the language of the preceding paragraph.

5.4  Allocation of ESOP and Profit Sharing Contributions and Forfeitures.

     (a)  Eligible Participants. On each Valuation Date the Administrator shall
allocate a portion of the aggregate amount of ESOP and Profit Sharing
Contributions, if any, contributed to the Plan pursuant to Article III, together
with forfeitures eligible for allocation under Paragraph 7.6, to the ESOP, or
Profit Sharing Accounts, as the case may be, of Participants who earned
Compensation from the Employer during the Plan Year and either: (1) retired,
became disabled or died during the Plan Year, or (2) completed one thousand
(1,000) or more Hours of Service during the Plan Year and were employed on
December 31/st/ of Such Plan Year (any Participant who satisfied the
requirements for allocation at the end of a Plan Year, as set forth above, is
hereinafter referred to as an "Eligible Participant").

     (b)  Manner of Allocation. The ESOP and Profit Sharing Contribution to be
allocated to each Eligible Participant's ESOP and Profit Sharing Account,
respectively, if any, shall be determined by a fraction, the numerator of which
is the Compensation paid to each Eligible Participant during such Plan Year, and
the denominator of which is the aggregate Compensation paid to all Eligible
Participants during the Plan Year.

5.5  Limits on Allocation of Bankshares Stock to Selling Shareholders in Section
1042 Transaction. Notwithstanding any provision in this Plan to the contrary, if
shares of Bankshares Stock are sold to the Plan by a shareholder in a
transaction for which special tax treatment is elected by such shareholder (or
his or her representative) pursuant to Section 1042 of the Code, no allocation
may be made to the ESOP Stock Accounts of:

     (a)  any person who owns (after the application of Section 318(a) of the
Code) more than 25 percent (25%) in value of the outstanding Bankshares Stock;
or

     (b)  any person who sold shares to the Plan, and any person who is related
to such shareholder (within the meaning of Section 267(b) of the Code), but
excluding lineal descendants of such shareholder as long as no more than 5
percent (5%) of the aggregate amount of all

                                       21

<PAGE>

Bankshares Stock sold by such shareholder or any other relative of the lineal
descendant in a transaction to which Section 1042 of the Code applies is
allocated to lineal descendants of such shareholder during the Nonallocation
Period (as defined below).

     Further, no other allocations of ESOP Contributions may be made to the
Accounts of such persons unless additional allocations are made to other
Participants, in accordance with the provisions of Sections 401(a) and 410 of
the Code. The term "Nonallocation Period" means the period beginning on the date
of sale and ending on the later of ten years after the date of sale or the date
of the allocation attributable to the final payment on the Acquisition Loan
incurred with respect to the sale.

     To the extent that a Participant is subject to the allocation limitation
described in this Paragraph 5.5 for a Plan Year, no other company stock,
employer contributions, forfeitures, earnings or assets shall be allocated to
such Participant to offset the reduction in amounts otherwise allocable to him
but for this Paragraph 5.5.

5.6  Limits on Matching Contributions to Satisfy Code (S) 401(m)
     Antidiscrimination Requirements.

     (a)  Prior Year Testing: For Plan Years beginning after December 31, 1996,
the Average Contribution Percentage ("ACP") for a Plan Year for Participants who
are Highly Compensated Employees for each Plan Year and the prior year's ACP for
Participants who were Non-Highly Compensated Employees for the prior Plan Year
must satisfy one of the following tests:

          (1)  The ACP for a Plan Year for Participants who are Highly
Compensated Employees for the Plan Year shall not exceed the prior year's ACP
for Participants who were Non-Highly Compensated Employees for the prior Plan
Year multiplied by 1.25; or

          (2)  The ACP for a Plan Year for Participants who are Highly
Compensated Employees for the Plan Year shall not exceed the prior year's ACP
for Participants who were Non-Highly Compensated Employees for the prior Plan
Year multiplied by 2, provided that the ACP for Participants who are Highly
Compensated Employees does not exceed the ACP for Participants who were
Non-Highly Compensated Employees in the prior Plan Year by more than 2
percentage points.

               For the first Plan Year this Plan permits any Participant to make
Employee Contributions, provides for Matching Contributions or both, and this is
not a successor plan, for purposes of the foregoing tests, the prior year's
Non-Highly Compensated Employees' ACP shall be 3 percent unless the Employer has
elected to use the Plan Year's ACP for these Participants.

               Current Year versus Prior Year Testing: If elected by the
Employer in a plan amendment, the ACP tests in (1) and (2) above will be applied
by comparing the current Plan Year's ACP for Participants who are Highly
Compensated Employees for each Plan Year with the current Plan Year's ACP for
Participants who are Non-Highly Compensated Employees. Once made, this election
can only be undone if the Plan meets the requirements for changing to Prior Year
Testing set forth in Notice 98-1 (or superseding guidance). For the 1997 Plan
Year, the Plan

                                       22

<PAGE>

elected to use Prior Year Testing. For Plan Years beginning on or after January
1, 1998, the Plan has used Current Year Testing and will continue to do so
unless and until the Plan is amended to reflect otherwise.

     (b)  Special Rules.

          (1)  A Participant is a Highly Compensated Employee for a particular
Plan Year if he or she meets the definition of a Highly Compensated Employee in
effect for that Plan Year. Similarly, a Participant is a Non-Highly Compensated
Employee for a particular Plan Year if he or she does not meet the definition of
a Highly Compensated Employee in effect for that Plan Year.

          (2)  Multiple Use: If one or more Highly Compensated Employees
participate in both a CODA and a plan subject to the ACP test maintained by the
Employer and the sum of the ADP and ACP of those Highly Compensated Employees
subject to either or both tests exceeds the Aggregate Limit, then the ACP of
those Highly Compensated Employees who also participate in a CODA will be
reduced in the manner described in Paragraph 5.6(d) of the Plan so that the
limit is not exceeded. The amount by which each Highly Compensated Employee's
Contribution Percentage Amounts is reduced shall be treated as an Excess
Aggregate Contribution. The ADP and ACP of the Highly Compensated Employees are
determined after any corrections required to meet the ADP and ACP tests and are
deemed to be the maximum permitted under such tests for the Plan Year. Multiple
use does not occur if either the ADP or the ACP of the Highly Compensated
Employees does not exceed 1.25 multiplied by the ADP and ACP, respectively, of
the Non-Highly Compensated Employees.

          (3)  For purposes of this Paragraph 5.6, the Contribution Percentage
for any Participant who is a Highly Compensated Employee and who is eligible to
have Contribution Percentage Amounts allocated to his or her account under two
or more plans described in Code (S) 401(a), or arrangements described in Code
(S) 401(k) that are maintained by the Employer, shall be determined as if the
total of such Contribution Percentage Amounts was made under each plan. If a
Highly Compensated Employee participates in two or more cash or deferred
arrangements that have different plan years, all cash or deferred arrangements
ending with or within the same calendar year shall be treated as a single
arrangement. Notwithstanding the foregoing, certain plans shall be treated as
separate if mandatorily disaggregated under regulations under Code (S) 401(m).

          (4)  In the event that this Plan satisfies the requirements of Code
(S)(S)401(m), 401(a)(4) or 410(b) only if aggregated with one or more other
plans, or if one or more other plans satisfy the requirements of such sections
of the Code only if aggregated with this Plan, then this Paragraph shall be
applied by determining the ACP of Employees as if all such plans were a single
plan. Any adjustments to the Non-Highly Compensated Employee ACP for the prior
year will be made in accordance with Notice 98-1 and any superseding guidance,
unless the Employer has elected to use the Current Year Testing method. Plans
may be aggregated in order to satisfy Code (S) 401(m) only if they have the same
Plan Year and use the same ACP testing method.

          (5)  For purposes of the ACP test, Employee Contributions are
considered to have been made in the Plan Year in which contributed to the trust.
Matching Contributions and Qualified Non-elective Contributions will be
considered made for a Plan Year if made no later than the end of the 12-month
period beginning on the day after the close of the Plan Year.

                                       23

<PAGE>

          (6)  The Employer shall maintain records sufficient to demonstrate
satisfaction of the ACP test and the amount of Qualified Non-elective
Contributions or Qualified Matching Contributions, or both, used in such test.

     (c)  Definitions.

          (1)  "Aggregate Limit" shall mean the sum of (i) 125 percent of the
greater of the ADP of the Non-Highly Compensated Employees for the prior Plan
Year or the ACP of Non-Highly Compensated Employees under the Plan subject to
Code (S) 401(m) for the Plan Year beginning with or within the prior Plan Year
of the CODA, and (ii) the lesser of 200 percent or 2 plus the lesser of such ADP
or ACP. "Lesser" is substituted for "greater" in "(i)" above, and "greater" is
substituted for "lesser" after "2 plus the" in "(ii)" if it would result in a
larger Aggregate Limit. If the Employer has elected to use the Current Year
Testing method, then in calculating the Aggregate Limit for a particular Plan
Year, the Non-Highly Compensated Employees' ADP and ACP for that Plan Year,
instead of for the prior Plan Year, is used.

          (2)  "Average Contribution Percentage" shall mean the average of the
Contribution Percentages of the Eligible Participants in a group.

          (3)  "Contribution Percentage" shall mean the ratio (expressed as a
percentage) of the Participant's Contribution Percentage Amounts to the
Participant's Compensation for the Plan Year.

          (4)  "Contribution Percentage Amounts" shall mean the sum of the
Employee Contributions, Matching Contributions, and Qualified Matching
Contributions (to the extent not taken into account for purposes of the ADP
test) made under the Plan on behalf of the Participant for the Plan Year. Such
Contribution Percentage Amounts shall not include Matching Contributions that
are forfeited either to correct Excess Aggregate Contributions or because the
contributions to which they relate are Excess Deferrals, Excess Contributions,
or Excess Aggregate Contributions. If so elected, the Employer may include
Qualified Non-elective Contributions in the Contribution Percentage Amounts. The
Employer may also elect to use Elective Deferrals in the Contribution Percentage
Amounts so long as the ADP test is met before the Elective Deferrals are used in
the ACP test and continues to be met following the exclusion of those Elective
Deferrals that are used to meet the ACP test.

          (5)  "Elective Deferral" shall have the same meaning that such term
has in Paragraph 4.3.

          (6) "Eligible Participant" shall mean any employee who is eligible to
make an Employee Contribution, or an Elective Deferral (if the Employer takes
such contributions into account in the calculation of the Contribution
Percentage), or to receive a Matching Contribution (including forfeitures) or a
Qualified Matching Contribution. If an Employee Contribution is required as a
condition of participation in the Plan, any Employee who would be a Participant
in the Plan if such Employee made such a contribution shall be treated as an
eligible participant on behalf of whom no Employee Contributions are made.

                                       24

<PAGE>

          (7)  "Employee Contribution" shall mean any contribution made to the
Plan by or on behalf of a Participant that is included in the Participant's
gross income in the year in which made and that is maintained under a separate
account to which earnings and losses are allocated.

          (8)  "Excess Aggregate Contributions" shall mean, with respect to any
Plan Year, the excess of:

               (i)  The aggregate Contribution Percentage Amounts taken into
     account in computing the numerator of the Contribution Percentage actually
     made on behalf of Highly Compensated Employees for such Plan Year, over

               (ii) The maximum Contribution Percentage Amounts permitted by the
     ACP test (determined by hypothetically reducing contributions made on
     behalf of Highly Compensated Employees in order of their Contribution
     Percentages beginning with the highest of such percentages).

                    Such determination shall be made after first determining
     Excess Elective Deferrals pursuant to Paragraph 4.3(c)(4) and then
     determining Excess Contributions pursuant to Paragraph 4.3(c)(3).

          (8)  "Matching Contribution" shall mean an Employer contribution made
to this or any other defined contribution plan on behalf of a Participant on
account of an Employee Contribution made by such Participant, or on account of a
Participant's Elective Deferral, under a plan maintained by the Employer.

     (d)  Distribution and/or Forfeiture of Excess Aggregate Contributions.
For Plan Years beginning after December 31, 1996, notwithstanding any other
provision of the Plan, Excess Aggregate Contributions, plus any income and minus
any loss allocable thereto, shall be forfeited, if forfeitable, or if not
forfeitable, distributed no later than the last day of each Plan Year to
Participants to whose accounts such Excess Aggregate Contributions were
allocated for the preceding Plan Year. Excess Aggregate Contributions are
allocated to the Highly Compensated Employees with the largest Contribution
Percentage Amounts taken into account in calculating the ACP test for the year
in which the excess arose, beginning with the Highly Compensated Employee with
the largest amount of such Contribution Percentage Amounts and continuing in
descending order until all the Excess Aggregate Contributions have been
allocated. For purposes of the preceding sentence, the "largest amount" is
determined after distribution of any Excess Aggregate Contributions. If such
Excess Aggregate Contributions are distributed more than 2 1/2 months after the
last day of the Plan Year in which such excess amounts arose, a 10-percent
excise tax will be imposed on the Employer maintaining the Plan with respect to
those amounts. Excess Aggregate Contributions shall be treated as annual
additions under the Plan.

          (1)  Determination of Income or Loss: Excess Aggregate Contributions
shall be adjusted for any income or loss up to the date of distribution. The
income or loss allocable to Excess Aggregate Contributions allocated to each
Participant is the sum of: (i) income or loss allocable to the Participant's
Employee Contribution account, Matching Contribution account, Qualified Matching
Contribution account (if any, and if all amounts therein are not used in the ADP
test), and, if applicable, Qualified Non-elective Contribution account and
Elective Deferral account

                                       25

<PAGE>

for the Plan Year multiplied by a fraction, the numerator of which is such
Participant's Excess Aggregate Contributions for the year and the denominator is
the Participant's account balance(s) attributable to Contribution Percentage
Amounts without regard to any income or loss occurring during such Plan Year;
and (ii) 10 percent of the amount determined under (i) multiplied by the number
of whole calendar months between the end of the Plan Year and the date of
distribution, counting the month of distribution if distribution occurs after
the 15/th/ of such month.

          (2)  Forfeitures of Excess Aggregate Contributions: Forfeitures of
Excess Aggregate Contributions may either be reallocated to the accounts of
Non-Highly Compensated Employees or applied to reduce Employer contributions, as
elected by the Employer.

          (3)  Accounting for Excess Aggregate Contributions: Excess Aggregate
Contributions allocated to a Participant shall be forfeited, if forfeitable, or
distributed on a pro-rata basis from the Participant's Employee Contribution
account, Matching Contribution account, and Qualified Matching Contribution
account (and, if applicable, the Participant's Qualified Non-elective
Contribution account or Elective Deferral account, or both).

     (e)  Designation of Nonforfeitable Base Contributions. The Employer may
elect to make nonforfeitable base contributions, defined below as Qualified
Matching Contributions, to the Plan on behalf of Employees.

          "Qualified Matching Contributions," for purposes of this Paragraph
5.6(e), shall mean Matching Contributions that are subject to the distribution
and nonforfeitability requirements under Code (S) 401(k) when made, without
regard to whether they are actually taken into account as Matching
Contributions.

     (f)  The provisions of this section are effective for Plan Years beginning
after December 31, 1996, unless otherwise noted.

5.7  Maximum Annual Addition.

     Effective for limitation years beginning after December 31, 1994:

     (a)  Notwithstanding anything in the Plan to the contrary, in Plan Years
other than those described in subparagraph 5.7(b) below, the Annual Addition of
an Employee shall not exceed the lesser of (a) $30,000, adjusted for cost of
living increases in accordance with regulations promulgated by the Secretary of
the Treasury or his delegate (the "Secretary"), or (b) twenty-five percent (25%)
of a Participant's Compensation for the Plan Year. For purposes of this
Paragraph 5.7, the term "Annual Addition" for any such Plan Year for an Employee
means the sum of (1) Employer contributions allocated to such Employee and (2)
forfeitures allocated to such Employee.

     (b)  Notwithstanding subparagraph 5.7(a) above, in the event no more than
one-third (1/3) of the employer contributions to the Plan for the Plan Year
concerned are allocated to the group of Employees consisting of Highly
Compensated employees (as defined in Code (S) 414(q)), the term "Annual
Addition" for an Employee in such Plan Years shall mean the sum of (1) employer
contributions allocated to such employee, less employer contributions to pay
interest

                                       26

<PAGE>

on ESOP Loans, which are deductible under Code (S) 404(a)(9)(B), and (2)
forfeitures allocated to such employee, less forfeitures of Bankshares Stock
acquired with proceeds of an ESOP Loan, the principal repayments of which were
deductible under Code (S) 404(a)(9)(A).

     (c)  Prior to the determination of the Participant's actual Compensation
for a Plan Year (hereinafter referred to as the "Limitation Year"), the Maximum
Annual Addition (hereinafter referred to as the "Maximum Permissible Amount")
may be determined on the basis of the Participant's estimated annual
Compensation for such Limitation Year. Such estimated annual Compensation shall
be determined on a reasonable basis and shall be uniformly determined for all
Participants similarly situated. For purposes of this Plan, Annual Additions in
excess of the Maximum Permissible Amount for a Limitation Year shall be referred
to as "Excess Amounts." Any Employer contributions (and allocations of
forfeitures) based on estimated annual Compensation shall be reduced by any
Excess Amounts carried over from prior years. As soon as is administratively
feasible after the end of the Limitation Year, the Maximum Permissible Amount
for such Limitation Year shall be determined on the basis of the Participant's
actual Compensation for such Limitation Year.

     (d)  If, pursuant to the above paragraph, there is an Excess Amount with
respect to a Participant for a Limitation Year, such Excess Amount shall be
disposed of as follows:

          (1)  Any Savings Contributions, to the extent they would reduce the
Excess Amount, will be distributed to the Participant;

          (2)  In the event that the Participant is in the service of the
Employer which is covered by the Plan at the end of the Limitation Year, then
such Excess Amounts must not be distributed to the Participant, but shall be
reapplied to reduce future Employer contributions (and any allocation of
forfeitures) under this Plan for the next Limitation Year (and for each
succeeding year, as necessary) for such Participant, so that in each such year
the sum of actual Employer contributions (and any allocation of forfeitures)
plus the reapplied amount shall equal the amount of Employer contributions (and
any allocation of forfeitures) which would otherwise be allocated to each
Participant's Account; and

          (3)  In the event that the Participant is not in the service of the
Employer which is covered by the Plan at the end of the Limitation Year, then
such Excess Amounts shall not be distributed to the Participant, but shall be
reapplied to reduce future Employer contributions (and allocation of any
forfeitures) for all remaining Participants. In the event the Plan is terminated
at a time when Excess Amounts are being held in suspense on behalf of one or
more Participants, then such Excess Amounts must not be distributed to such
Participant(s), but shall revert to the Employer.

     (e)  Notwithstanding any other provision of this Plan, if any Annual
Additions are allocated under other defined contribution plans maintained by the
Employer with respect to a Participant in this Plan, and the Annual Addition
that would otherwise be allocated to the Accounts under this Plan would cause
the Annual Additions for the Limitation Year to exceed the Maximum Permissible
Amount, forfeitures and Employer contributions, in the order stated, shall be
reduced so that the Annual Additions under all such plans for the Limitation
Year will equal the Maximum Permissible Amount. If the Annual Additions with
respect to the Participant under such other

                                       27

<PAGE>

defined contribution plans in the aggregate are equal to or greater than the
Maximum Permissible Amount, as defined in this Plan, any amount contributed or
allocated to his Account for the Limitation Year will be treated as an Excess
Amount. If there is an Excess Amount for any Limitation Year, the excess will be
disposed of subject to the provisions for disposing of Code (S) 415 excesses
that exist in the Plan.

     (f)  For purposes of this Paragraph 5.7 and Code (S) 415, the term
"compensation" shall mean the total amount of wage, salary, overtime, bonus or
other payments made by the Employer to a Participant during the Plan Year for
services rendered, excluding: (a) contributions made by the Employer under this
Plan (other than those made pursuant to a salary reduction agreement), (b)
contributions made by the Employer under any other plan of deferred
compensation, (c) amounts realized from the exercise of a non-qualified stock
option or from the disposition of stock acquired under a qualified stock option,
(d) expense reimbursements, prizes or gifts of property other than money, or (e)
group term life insurance or other amounts which receive special tax benefits
within the meaning of Treas. Reg. (S) 1.415-2(d)(2). For Plan Years beginning
after December 31, 1997, for purposes of this Paragraph 5.7 and Code (S) 415,
the term "compensation" includes amounts which are contributed by the Employer
pursuant to a salary reduction agreement and which are not includible in the
gross income of the Participant under Code (S)(S) 125, 401(e)(3), 402(h)(1)(B),
403(b) or 457(b), and Employee contributions described in Code (S) 414(h)(2)
that are treated as Employer contributions.

          For limitation years beginning on and after January 1, 2001, for
purposes of applying the limitations described in this Paragraph 5.7,
compensation paid or made available during such limitation years shall include
elective amounts that are not includible in the gross income of the employee by
reason of (S) 132(f)(4).

     (g)  In accordance with (S) 1452(d)(1) of the Small Business Job Protection
Act of 1996, the provisions of Code (S) 415(e) are repealed, with respect to the
provisions of this Plan, effective as of the first day of the first Limitation
Year beginning on and after January 1, 2000.

                                   ARTICLE VI

                        VALUATION, PARTICIPANT INVESTMENT
                           ELECTIONS AND VOTING RIGHTS

6.1  Year-End Valuation of ESOP Assets.

     (a)  On each December 31/st/ Valuation Date, the Trustee shall determine
the fair market value of all Bankshares Stock and any other assets in the ESOP
portion of the Trust (exclusive of any Employer contribution for the year ending
on such Valuation Date) and shall deduct therefrom all liabilities of the ESOP
portion of the Trust accrued to such Valuation Date in order to determine the
net value of such Trust assets on the December 31/st/ Valuation Date. Valuation
of Bankshares Stock shall be made in good faith and shall be based on all
relevant factors for determining the fair market value of securities. If the
Bankshares Stock is not readily tradable on an established market, an
independent appraisal of fair market value of such stock shall be made by a
person who

                                       28

<PAGE>

customarily makes such appraisals and who is independent of any party to a
transaction under Treas. Regs. (S)(S) 54.4975-7(b)(9) and (12) as of each
December 31/st/ Valuation Date and as of the date of any transaction between the
Employer or any other "disqualified person," as defined in Code (S) 4975, and
the Plan involving a transfer of Bankshares Stock.

     (b)  After such net value has been thus determined (and prior to the
allocation of the Employer's contribution for the year ending on such Valuation
Date), the Trustee shall notify the Employer and the Administrator of the net
values and the Administrator shall, in the order stated:

          (1) determine and deduct from the net value of the Trust an amount
equal to the total amount of forfeitures eligible for allocation since the
preceding December 31st Valuation Date (see Paragraph 7.6); and

          (2) adjust the net balances in each Participant's ESOP Account in the
Trust upward or downward, pro rata, according to the ratio of the balance of
such Account as of the preceding December 31/st/ Valuation Date, decreased by
the Account's proportionate amount of any distributions and forfeitures during
the Plan Year to the beginning balances, as so adjusted, of all Participants'
ESOP Accounts in the Trust as of the preceding December 31/st/ Valuation Date,
so that the total of all such adjusted net balances will equal the net value of
the ESOP Trust assets as determined by the Trustee as of the December 31/st/
Valuation Date, less the total amount of forfeitures as determined by the
Administrator under subparagraph (a) above; it being intended that all
appreciation and depreciation of the ESOP Trust assets and all income and losses
of the ESOP portion of the Trust will be allocated to the ESOP Accounts of
Participants.

     (c)  The net income (or loss) of each Participant's Stock Account will be
determined as of each December 31/st/ Valuation Date. Any stock dividends on
shares of Bankshares Stock held by the Trust shall be allocated to each
Participant's Stock Account in the ratio in which the cumulative number of
shares allocated to his Stock Account as of the preceding Decmeber 31/st/
Valuation Date bears to the total cumulative number of shares of Bankshares
Stock allocated to the Stock Accounts of all Participants as of that date.
Subject to Paragraph 5.4, any cash dividends shall be allocated to each
Participant's Cash Account in the ratio in which the cumulative number of shares
allocated to his Stock Account as of the preceding December 31/st/ Valuation
Date bears to the total cumulative number of shares of Bankshares Stock
allocated to the Stock Accounts of all Participants as of that date. All other
net income (or loss) will be allocated to each Participant's ESOP Account in the
ratio in which the balance of his ESOP Account on the preceding December 31/st/
Valuation Date relating to investments other than Bankshares Stock bears to the
sum of the balances relating to investments other than Bankshares Stock of the
ESOP Accounts of all Participants on that date. For this purpose, ESOP Account
balances shall be reduced by amounts distributed to Participants during the Plan
Year. The net income (or loss) includes the increases (or decreases) in the fair
market value of assets of the Trust, interest, dividends, other income and
expenses attributable to assets other than Bankshares Stock in the ESOP Accounts
since the preceding Valuation Date. Net income (or loss) does not include the
interest paid under any installment contract for the purchase of Bankshares
Stock by the Trust or on any ESOP loan obtained by the Trust to purchase
Bankshares Stock. Notwithstanding the foregoing, no income (or loss) shall be
allocated to a terminated Participant's Stock Account for the Plan Year in which
he receives final distribution of his vested Account balance.

                                       29

<PAGE>

6.2  Daily Valuation of Investment Funds. The Investment Funds shall be valued
by the Trustee at market values as of each Valuation Date. As of each Valuation
Date, an allocation shall be made to each Participant's Account within each
Investment Fund to reflect the effect of income, collected and accrued, realized
and unrealized profits and losses, expenses and all other transactions, in the
same proportion that the balance in each such Account then bears to the total of
all such Accounts in such Fund. Such allocations shall be made to each
Participant's Account up to and including the Valuation Date immediately prior
to the date on which the Participant's Account is completely redeemed from all
Investment Funds for distribution to him.

6.3  Participant Right to Direct Trustee to Diversify Stock Account. A
Participant may elect, during the ninety (90) day period beginning on the last
day of each of the first four (4) Plan Years during the "qualified election
period," as defined below, to direct the Trustee to diversify the investment of
up to twenty-five percent (25%) (fifty percent (50%) for and after the fifth
Plan Year in the qualified election period) of the portion of his Stock Account,
less amounts previously so diversified, among the Investment Funds described in
Paragraph 6.5. The "qualified election period" is the five (5) Plan Year period
beginning with the Plan Year during which a Participant attains age fifty-five
(55) and completes ten (10) years of participation in the Plan. For the purpose
of this Paragraph 6.3, the phrase "year of participation" means a Plan Year
during which an Employee is an Eligible Participant in the Plan, as defined in
Paragraph 5.3(a). To the extent that the Participant elects to diversify the
investment of the stock balance in his Stock Account under this Paragraph 6.3,
he shall not subsequently have any right to receive distribution of that portion
of his Account so diversified in the form of Bankshares Stock. This Paragraph
6.3 shall be administered in accordance with Code (S) 401(a)(28)(B) or any
successor thereto.

6.4  Voting Rights for Stock Accounts. If the Bankshares Stock is a
registration-type class of securities, as defined in Code (S) 409(e)(4), voting
shares of Bankshares Stock allocated to the Account of a Participant or
Beneficiary shall be voted on all corporate matters as each such Participant or
Beneficiary shall direct the Trustee. If the Bankshares Stock is not a
registration-type class of securities, as defined in Code (S) 409(e)(4), the
Trustee shall vote all shares of Bankshares Stock, whether allocated or
unallocated, held in the Trust, in its sole discretion. Notwithstanding the
preceding sentence, however, each Participant or Beneficiary (as applicable)
shall be entitled to vote the shares of Bankshares Stock allocated to his Stock
Account (whether "vested" in accordance with Paragraph 7.6 or not) with respect
to any corporate matter which involves a corporate merger or consolidation,
recapitalization, reclassification, liquidation, dissolution, sale of
substantially all assets of a trade or business, or such other transactions as
are designated in Treasury regulations promulgated under Code (S) 409(e)(3). On
all such transactions, the Trustee shall exercise voting rights in its sole
discretion with respect to any shares of Bankshares Stock as to which voting
instructions from Participants or Beneficiaries are not received in the time or
manner prescribed by the Administrator for this purpose.

6.5  Participant Direction of Savings, Matched (Pre-April 1, 2000), Profit
Sharing and Rollover Accounts. This Plan is intended to meet the requirements of
ERISA (S) 404(c) and regulations thereunder with respect to Savings, Matched
(Pre-April 1, 2000), Profit Sharing and Rollover Accounts in that Participants
are authorized and empowered to direct the investment of such Accounts among the
Investment Funds described below. Neither the Trustee nor the Plan Administrator
shall be under any duty to question any investment direction of the Participant,
or to make any suggestions to the Participant in connection therewith, and the
Trustee shall comply as

                                       30

<PAGE>

promptly as practicable with directions given by the Participant hereunder.
Neither the Trustee, the Plan Administrator nor any other fiduciary shall be
liable for any losses incurred by the Participant as a result of the
Participant's exercise of investment directions hereunder. Investment directions
given by a Participant may be of a continuing nature or otherwise and may be
revoked or changed by the Participant at such time and in such manner as
prescribed herein.

     (a)  Investment Funds. The plan will provide a broad range of investment
funds ("Funds") to allow Participants to direct the investment of their
accounts. The Plan Administrator may change or supplement the Funds from time to
time, as it deems necessary or appropriate. Detailed information on each of the
Funds available under the Plan will be provided by the Plan Administrator to all
Participants periodically and is available to all Participants upon request. The
Funds provided are intended to provide the Participants and Beneficiaries with a
reasonable opportunity to: (i) materially affect the potential return on amounts
in his individual account with respect to which he is permitted to exercise
control and the degree of risk to which such amounts are subject; (ii) choose
from at least three investment alternatives, each of which is diversified, has
materially different risk and return characteristics, which in the aggregate
enable the Participants and Beneficiaries by choosing among such Funds to
achieve a portfolio with aggregate risk and return characteristics at any point
within the range normally appropriate for any such Participant or Beneficiary,
and each of which when combined with investments in the other alternatives tends
to minimize through diversification the overall risk of a Participant's or
Beneficiary's portfolio; (iii) diversify the investment of that portion of his
individual account with respect to which he is permitted to exercise control so
as to minimize the risk of large losses, taking into account the nature of the
plan and the size of Participants' or beneficiaries' accounts.

          (1) Bankshares Stock Fund. One of the Funds is the Bankshares Stock
Fund. The Bankshares Stock Fund shall consist of shares of the stock of the
Employer or Affiliate (determined pursuant to Section 414(b) of the Code), which
shall be employer securities within the meaning of Sections 409(1) and
4975(e)(8) of the Code and such cash balances as the Trustee deems appropriate.
Any Bankshares Stock so described must be a security that is readily tradable on
an established securities market. It is generally expected that Bankshares Stock
will represent approximately 50% to 100% of the range of total assets, and the
remainder of the Bankshares Stock Fund will consist of cash reserves and
temporary investments. The Trustee with respect to Bankshares Stock may from
time to time determine the percentage (or percentage range) of total assets of
the Employer Stock Fund which are invested in Stock.

              If Bankshares Stock ceases to be readily tradable on an
established securities market, Bankshares Stock shall be converted to cash as
soon as practicable taking into consideration the effect of such liquidation on
its value. Following such conversion to cash, the assets shall be transferred as
of any Valuation Date to another Fund division in accordance with the investment
directions of the Employer.

              Voting rights with respect to Bankshares Stock held in the
Bankshares Stock Fund shall be passed through to Participants (or if deceased,
to their Beneficiaries) when and to the extent required or permitted by this
subparagraph. When passed through, such rights that are not exercised shall not
be exercised. Each Participant (or if deceased, his Beneficiary) shall have the
right to direct the Trustee with respect to Bankshares Stock as to the manner in

                                       31

<PAGE>

which the voting rights of Bankshares Stock which are entitled to vote and which
is allocated to the accounts of such Participant is to be exercised.

          The Trustee shall maintain confidentially with respect to Participant
directions to invest or cease investment in the Bankshares Stock Fund,
Participants' interests in the Bankshares Stock Fund and Participant directions
regarding the exercise of voting, tender and similar rights for Bankshares Stock
as is intended under ERISA (S) 404(c). Confidentiality shall include the
collection of investment direction information by the Trustee with respect to
Bankshares Stock and the collection of voting instructions by the Trustee,
followed, if applicable, by delivery of voting instructions to the Custodian.
Information regarding investment directions and voting instructions shall be
retained by the Trustee with respect to Bankshares Stock, as required by ERISA
and other applicable laws, but will not be disclosed to management of the
Trustee except to the extent required by securities or other applicable laws
which are not pre-empted by ERISA.

     (b)  Investment Procedures. Participants may invest all or any portion of
their Savings, Matched (accumulated prior to April 1, 2000), Rollover and Profit
Sharing Accounts in any one or more Funds (investment elections must be 0% or in
increments of 1% and must total 100%). Investment elections may be made as of
any business day by, if permitted, telephonic or electronic instruction to the
Plan's automated or internet-based response systems. All investment elections
shall specify how the total balance in the Participant's Savings, Matched
(accumulated prior to April 1, 2000), Rollover and Profit Sharing Accounts, as
of the applicable date, as well as any future contributions, are to be allocated
among the Funds. A Participant may specify that contributions made to his
Accounts after an applicable date, together with income, gains or losses
attributable to such contributions, shall be allocated among the Funds in a
manner differing from the investment allocation of his balance in such accounts
existing as of such date, together with income, gains or losses attributable to
such account balance thereafter; provided, that in any subsequent change in
investment instruction, the Participant shall indicate how his then existing
account balance, including all previous contributions, is to be allocated among
the Funds on and after the subsequent applicable date. A Participant may change
his designation of Funds under this paragraph as of any day by filing a form
prescribed for such purpose with the Administrator or by telephonic or
electronic instruction to the Plan's automated or internet-based response
systems. Any such change shall be implemented as soon as practicable after the
Administrator has received notice of the Participant's investment change
request. A Participant's designation shall be expressed in increments of one
percent (1%) of the amounts to be invested.

     (c)  Account Adjustments. The aggregate total of all Participants'
interests in each Fund other than Participants' ESOP, Matched (accumulated on
and after April 1, 2000), and Loan Accounts will be valued at market values as
of each daily Valuation Date. Each Account invested in a particular Fund will be
increased or decreased to reflect a proportionate share of the net increase or
net decrease of the aggregate value of the Fund since the preceding Valuation
Date. The findings of the Trustee as to the net increase or net decrease of the
value of Funds shall be conclusive. Participants will receive quarterly
statements showing the current value of their Savings, Matched (accumulated
prior to April 1, 2000), Rollover and Profit Sharing Accounts and the activity
in such Accounts for the quarter.

                                       32

<PAGE>

     (d)  Fiduciary Responsibility. To the extent that a Participant exercises
control over the assets in his Account, as determined under regulations
prescribed by the Secretary of Labor under ERISA (S) 404(c), neither the
Administrator, the Advisory Committee, the Investment Manager, the Trustee nor
any other Fiduciary shall be liable for any loss, or by reason of any breach,
which results from such Participant's exercise of control. Neither the Employer
nor any Fiduciary who complies with the standards set forth in this Plan and
Trust Agreement shall be liable for any loss which results from investment
performance under any of the Investment Funds, including, but not limited to,
depreciation in the value of stock or other property held under any of the
Investment Funds.

                                   ARTICLE VII

                            DISTRIBUTION OF BENEFITS

7.1  General Procedure. Upon a Participant's retirement, termination or any
other event under this Article VII with respect to which a vested Account
becomes distributable, the Administrator shall notify the Trustee and the
Participant or his Beneficiary as to the amount of the Participant's vested
Account balance. After notification, the Trustee shall distribute any amount of
vested Account balance directed by the Administrator. During any period
following the retirement, termination or other event described in this Article
VII and prior to the Valuation Date immediately preceding the date of
distribution, the Participant's vested Account shall be adjusted to reflect
dividends on Bankshares Stock held in the Stock Account, payments for Bankshares
Stock purchases, and any other items of income, expense, gain or loss
attributable thereto. Except as provided in Paragraph 5.4, no Employer
contributions or forfeitures shall be allocated to the Account of a Participant
subsequent to the date of retirement, termination or other event described in
this Article VII.

7.2  Normal Retirement. A Participant may retire when he shall have reached his
Normal Retirement Age. Such Participant shall be fully vested in his Account and
his benefits shall be payable in accordance with Paragraph 7.9, in the form
prescribed by Article VIII.

7.3  Late Retirement. A Participant who does not retire at Normal Retirement Age
shall be fully vested in his Account and may continue to participate in the
Plan. Any termination of such Participant's employment, for any reason
whatsoever, after his Normal Retirement Age shall be deemed actual retirement.
Such Participant's Account shall be payable in accordance with Paragraph 7.9, in
the form prescribed by Article VIII.

7.4  Disability. Any Participant whose employment is terminated as a result of
Disability shall be deemed to retire on the date of such termination and shall
be fully vested in his Account. Such Participant's Account shall be payable in
accordance with Paragraph 7.9, in the form prescribed by Article VIII.

7.5  Death of Participant. If a Participant shall die prior to his retirement
and while still in the employ of the employ of the Employer, his Account shall
vest, and upon due proof of death, shall

                                       33

<PAGE>

be paid to the Beneficiary described in Paragraph 8.2, in accordance with
Paragraph 7.9 and in the form prescribed by Article VIII.

7.6  Severance of Employment.

     (a)  Vested Accounts. In the event a Participant resigns or is discharged
or otherwise terminates, or is deemed to have terminated, his employment after
January 1, 2001, and prior to his death or his eligibility for retirement under
Paragraphs 7.2, 7.3, or 7.4, there shall vest in such Participant an amount
equal to the following percentage of his Account:

<TABLE>
<CAPTION>
                                       Vested          Forfeited
          Years of Service           Percentage        Percentage
          ----------------           ----------        ----------
          <S>                        <C>               <C>
          Less than 2 years               0%              100%

          2 years or more               100%                0%
</TABLE>

          The Participant shall always be one hundred percent (100%) vested in
his Savings and Rollover Accounts. Such vested benefits shall be paid in
accordance with Paragraph 7.8, in the form prescribed by Article VIII.

     (b)  Forfeitures of Non-vested Accounts. Any balance in a Participant's
Account which is not vested pursuant to subparagraph (a) above shall be
forfeited at the end of the Plan Year which constitutes the fifth (5th)
consecutive one-year Break in Service of the Participant and reallocated at such
time to the Accounts of the remaining Participants in accordance with Paragraph
5.4. Notwithstanding the foregoing, if a Participant receives a distribution
pursuant to Paragraph 7.8, the forfeiture shall be allocated at the end of the
Plan Year during which the distribution was made. A Participant who terminates
with a zero vested Account balance shall be deemed to have received an immediate
distribution, and his forfeited Account balance shall be allocated in accordance
with Paragraph 5.4 at the end of the Plan Year in which he terminated
employment.

     (c)  Reinstatement of Certain Accounts Upon Reemployment. If a Participant
receives a distribution pursuant to Paragraph 7.8 prior to incurring five (5)
consecutive one-year Breaks in Service, and such Participant resumes employment
covered under the Plan, the Participant's Account balance will be reinstated to
its balance on the date of the prior distribution, if the Participant repays to
the Plan the full amount of the prior distribution before the earlier to occur
of (i) the Participant's incurring five (5) consecutive one-year Breaks in
Service following the date of his termination of employment, or (ii) the fifth
(5th) anniversary of the date of the Participant's reemployment.

7.7  Commencement of Distributions.

     (a)  General Rule. In the case of a Participant's termination, retirement,
disability or death, distribution of the Participant's vested Account balance
shall begin as provided in Paragraphs 7.8 and 7.9, subject to deferral pursuant
to subparagraph (b) below. In any event, distribution shall commence no later
than the sixtieth (60th) day after the last occurring of the following:

                                       34

<PAGE>

          (1) The close of the Plan Year in which the Participant reaches his
Normal Retirement Age; or

          (2) The close of the Plan Year in which the termination of service
occurs.

     (b)  Required Commencement Date. Irrespective of any contrary provision of
the Plan, distribution of the Account balance of a Participant shall be made or
shall commence by April 1 of the calendar year next following the later of: (i)
the calendar year on which the Participant attains age 70 1/2 or (ii) the
Participant's retirement, termination or any other event under Article VI with
respect to which a vested Account becomes distributable ("Required Commencement
Date"); provided, however, that the Required Commencement Date of a Participant
who is a five-percent owner (as defined in Code (S) 416) of the Employer or an
Affiliate in the calendar year in which the Participant attains age 70 1/2 shall
be April 1 of the calendar year next following the calendar year in which the
Participant attains age 70 1/2.

          A Participant who is not a 5 percent owner and who attains age 70 1/2
while still employed by an Employer or an Affiliate may elect to receive a
distribution commencing April 1 of the calendar year next following the calendar
year in which he attains age 70 1/2.

          This subparagraph is effective for plan years beginning after December
31, 1996.

7.8  Valuation and Time of Payment for Terminated Participants.

     (a)  Payments in Excess of $5,000. If the value of a Participant's vested
Account balance, determined as of the Valuation Date coincident with or
immediately preceding the Participant's separation from service, exceeds $5,000,
distribution of all vested Account balances, other than the ESOP Account, of the
Participant shall be made to the Participant as soon as practicable after the
Participant's separation from service, subject to the Participant's right to
defer distribution of his Account until attainment of Normal Retirement Age.
Unless the Participant elects otherwise, the amount in the ESOP Account of a
terminated Participant shall be determined on the basis of the valuation of
Trust assets as of the Valuation Date coincident with or immediately following
the end of the Plan Year during which he incurs his fifth (5th) consecutive
one-year Break in Service. The vested portion of such Account, determined under
Paragraph 7.6, shall be paid to the Participant as soon as practicable
thereafter; provided, however, that such Participant may elect to defer
distribution of his Account until his attainment of Normal Retirement Age.

     (b)  Cash-out of Small Payments. If a Participant terminates service and
the value of his vested Account balance is not greater than $5,000, the Plan
Administrator may direct that the Participant receive a distribution of the
entire portion of such vested Account balance prior to his incurrence of five
(5) consecutive one-year Breaks in Service without the Participant's consent. In
that event, the nonvested portion will be treated as a forfeiture as of the end
of the Plan Year during which the distribution was made, subject to the
reinstatement requirement of subparagraph 7.6(c) above.

7.9  Valuation and Time of Payment for Retiring, Disabled or Deceased
Participants. The amount in the Savings, Rollover and Profit Sharing Accounts of
a Participant who retires pursuant to Paragraphs 7.2 or 7.3, who becomes
disabled pursuant to Paragraph 7.4, or who dies pursuant to

                                       35

<PAGE>

Paragraph 7.5 shall be distributed to the Participant or his Beneficiary as soon
as practicable after the date of retirement, Disability or death, as the case
may be, valued as of the Valuation Date on which distribution occurs, in the
form prescribed by Article VIII. The amount in all other Accounts of the
Participant shall be determined on the basis of the valuation of the Account
assets as of the March 31 Valuation Date coincident with or immediately
preceding the date of retirement, Disability or death, as the case may be, and
if desired by the Participant or Beneficiary, fifty percent (50%) of such amount
shall be paid to such Participant or Beneficiary as soon as possible after the
Participant's Retirement Date or date of death, as the case may be, in the form
prescribed by Article VIII. A residual payment or payments shall be made to the
Participant or his Beneficiary after the end of the Plan Year in which the
Participant's retirement, Disability or death occurred, representing the balance
in the Participant's ESOP Account, together with his share of the Bank's
contribution and Plan earnings, if any, for the Plan Year in which his
retirement, Disability or death occurred. In the event the Participant or
Beneficiary does not elect to receive an immediate, partial payment of said
Accounts, the amount in said Accounts shall be determined as of the Valuation
Date coincident with or next following the Participant's Retirement Date or date
of death, and this amount shall be paid to the Participant or his Beneficiary as
soon thereafter as possible in a single lump sum, in the form prescribed by
Article VIII.

7.10 Death of a Former Participant. In the event of the death of a former
Participant with a vested Account balance, the Trustee shall make payment of
that vested Account balance (as determined under Paragraph 7.6), upon due proof
of his death, to the Beneficiary described in Paragraph 8.2. Payment of such
Participant's Savings, Matched, Rollover and Profit Sharing Accounts shall
commence as soon as practicable after the Participant's death, valued as of the
Valuation Date on which distribution occurs and payable in the form prescribed
in Article VIII. Payment of fifty percent (50%) of the ESOP Account of such
Participant, valued as of the March 31 Valuation Date preceding the
Participant's death, shall be made as soon as practicable after the
Participant's death. A residual payment or payments shall be made to such
Beneficiary after the end of the Plan Year in which the Participant's death
occurred, representing the balance in said Accounts, together with the
Participant's share of the Plan earnings, if any, for the Plan Year in which his
death occurred.

7.11 Loans to Participants.  The Plan does not permit loans to participants.

7.12 Hardship Distributions.

     (a)  In-Service Distributions. In the case of "hardship," as hereinafter
defined, a Participant may apply to the Administrator for an in-service
distribution equal to the lesser of (1) the balance of his Savings, Matched
(accrued prior to April 1, 2000), and Rollover Accounts (exclusive of any
earnings thereon) as of the Valuation Date preceding the date on which such
application is received, (2) 50% of his total vested Account balance as of the
Valuation Date preceding the date on which such application is received, or (3)
the amount necessary to satisfy the financial need of the Participant.
Notwithstanding the preceding sentence, in no event shall an in-service
distribution on account of hardship be made in an amount less than $1,000. The
amount available for distribution from the Participant's accounts shall be
reduced to reflect any outstanding loan balance. Any distribution made pursuant
to this Paragraph shall be deemed to be made as of the Valuation Date
immediately preceding the date of distribution.

                                       36

<PAGE>

     (b)  Hardship Defined. As used herein, the term "hardship" shall mean
circumstances of sufficient severity that the Participant is confronted with an
immediate and heavy financial need on account of one of the following or any
other reason permitted by the Internal Revenue Service:

          (1)  Medical expenses described in Code (S) 213(d) incurred by the
Participant, his spouse, or any of his dependents (as defined in Code (S) 152);

          (2)  The purchase (excluding mortgage payments) of a principal
residence for the Participant;

          (3)  Payment of tuition and related educational fees for the next
twelve (12) months of post-secondary education for the Participant, his spouse,
children or dependents; or

          (4)  The need to prevent the eviction of the Participant from his
principal residence or foreclosure on the mortgage of the Participant's
principal residence.

     (c)  Conditions of Distribution. No distribution shall be made pursuant to
this Paragraph unless the Administrator, based upon the Participant's
representation and such other facts as are known to the Administrator,
determines that all of the following conditions are satisfied:

          (1)  The distribution is not in excess of the amount of the immediate
and heavy financial need of the Participant;

          (2)  The Participant has obtained all distributions, other than
hardship distributions, and all nontaxable loans currently available under all
plans maintained by the Employer;

          (3)  The Plan, and all other plans maintained by the Employer, provide
that the Participant's elective deferrals will be suspended for at least twelve
(12) months from the date the hardship distribution is received; and

          (4)  The Plan, and all other plans maintained by the Employer, provide
that the Participant may not make elective deferrals for the Participant's
taxable year immediately following the taxable year of the hardship distribution
in excess of the applicable limit under Code (S) 402(g) for such next taxable
year less the amount of such Participant's elective deferrals for the taxable
year of the hardship distribution. Effective for distributions on or after
January 1, 2001, the provisions of this Section 7.12(c)(4) shall no longer
apply.

     (d)  Administration of Distribution. A request for a hardship distribution
under this Paragraph shall be made on forms prescribed by the Administrator. The
Administrator shall establish a uniform and non-discriminatory policy for
reviewing hardship distribution applications, and the Administrator's decision
shall be final. The Administrator shall inform the Trustee of any authorized
hardship distribution, and the Trustee shall then pay to such Participant the
amount authorized by the Administrator as soon as practicable after all required
tax notices have been provided to the Participant and duly acted upon. The
amount of Participant's hardship distribution shall be taken from the
Participant's Savings, Matched (accrued before April 1, 2000), and Rollover

                                       37

<PAGE>

Accounts. Any hardship distribution from the Participant's Account
shall be made from each of the Participant's investment Funds on a pro rata
basis.

                                  ARTICLE VIII

                                 FORM OF PAYMENT

8.1  Normal Form. The normal form of payment of benefits from a Participant's
Stock Account and Matched Account (to the extent that such account contains
shares of Bankshares Stock accumulated on and after April 1, 2000), shall be in
whole shares of Bankshares Stock, subject to Paragraph 8.3. The normal form of
payment of benefits from any of a Participant's other Accounts at the time of
distribution shall be paid in a lump sum in cash. Cash will be distributed in
lieu of any fractional shares of Bankshares Stock.

     Notwithstanding the preceding paragraph, if the charter or bylaws of
Resource Bankshares Corporation restrict the ownership of substantially all
outstanding shares of Bankshares Stock to current employees and the Trust, or if
Resource Bankshares Corporation, for the year in which distribution occurs, has
elected to be taxed under subchapter "S" of the Code, the distribution of a
Participant's Account may be made entirely in cash without granting the
Participant the right to demand distribution in Bankshares Stock.

8.2  Payment in Event of Death.

     (a)  Death benefits as described in Paragraphs 7.5 or 7.10 shall be paid to
the surviving spouse of the Participant, if any. In the event there is no
surviving spouse, or such spouse consented to the Participant's designation of
another Beneficiary, in the manner specified below, benefits shall be paid to
any surviving Beneficiary. If there is no surviving designated Beneficiary, such
amounts shall be paid in a lump sum to the estate of the Participant or former
Participant.

          In the event the Participant is married at the time of his death, no
designation of a Beneficiary to receive death benefits other than such
Participant's spouse shall be valid unless the spouse of the Participant
consents in writing to such election, and such consent acknowledges the effect
of such election and is witnessed by a Plan representative or notary public.

     (b)  The following rules shall apply to death benefits as described in
Paragraph 7.5 or 7.10:

          (1)  Distribution beginning before death. If the Participant dies
after distribution of his or her interest has begun, the remaining portion of
such interest will continue to be distributed as rapidly as under the method of
distribution being used prior to the Participant's death.

          (2)  Distribution beginning after death. If the participant dies
before the distribution of his or her interest begins, distribution of the
participant's entire interest shall be completed by December 31 of the calendar
year containing the fifth anniversary of the

                                       38

<PAGE>

participant's death except to the extent that an election is made to receive
distributions in accordance with a. or b. below:

               a. if any portion of the Participant's interest is payable to a
          designated beneficiary, distributions may be made over the life or
          over a period certain not greater than the life expectancy of the
          designated beneficiary commencing on or before December 31 of the
          calendar year immediately following the calendar year in which the
          Participant died;

               b. if the designated beneficiary is the participant's surviving
          spouse, the date distributions are required to begin in accordance
          with (2)a. above shall not be earlier than the later of (i) December
          31 of the calendar year immediately following the calendar year in
          which the Participant died and (ii) December 31 of the calendar year
          in which the Participant would have attained age 70 1/2.

               If the participant has not made an election pursuant to this
paragraph 8.2(b)(2) by the time of his or her death, the participant's
designated beneficiary must elect the method of distribution no later than the
earlier of (i) December 31 of the calendar year in which distributions would be
required to begin under this Paragraph, or (ii) December 31 of the calendar year
which contains the fifth anniversary of the date of death of the Participant. If
the Participant has no designated beneficiary, or if the designated beneficiary
does not elect a method of distribution, distribution of the participant's
entire interest must be completed by December 31 of the calendar year containing
the fifth anniversary of the Participant's death.

          (3)  For the purposes of Paragraph 8.2(b)(2) above, if the surviving
spouse dies after the Participant, but before payments to such spouse begin, the
provisions of Paragraph 8.2(b)(2), with the exception of paragraph b. therein,
shall be applied as if the surviving spouse were the Participant.

          (4)  For the purposes of this Paragraph 8.2(b), distribution of a
Participant's interest is considered to begin on the Participant's required
beginning date (or, if Paragraph 8.2(b)(3) is applicable, the date distribution
is required to begin to the surviving spouse pursuant to Paragraph 8.2(b)(2)
above). If distribution in the form of an annuity irrevocably commences to the
Participant before the required beginning date, the date distribution is
considered to begin is the date distribution actually commences.

          (5)  Distributions shall be made in accordance with the requirements
of the regulations under Code (S) 401(a)(9), including the minimum distribution
requirements of Prop. Reg. (S) 1.401(a)(9)-1 and the minimum distribution
incidental benefit requirements of Prop. Reg. (S) 1.401(a)(9)-2.

8.3  Optional Forms of Payment.

     (a)  ESOP Stock and Cash Accounts. Notwithstanding the normal forms of
payment described above, a Participant or Beneficiary may elect, at any time
prior to receipt of payment(s) under Paragraphs 7.8, 7.9 or 7.10, by written
notice to the Administrator, to have the balance in his ESOP Accounts paid to
him in one of the following forms:

                                       39

<PAGE>

          (1)  Single Lump Sum. A single lump sum in cash; or

          (2)  5-Year Payout. Under this form of payment, the Participant
receives a fraction of the balances in his Cash and Stock Accounts each year,
commencing in the Plan Year in which his Account first becomes payable under
Article VII. The fraction of the Account to be distributed each year during the
5-Year Payout shall be the current year value of one-fifth of the value of the
cash or shares of Bankshares Stock credited to a Participant's ESOP Cash and
Stock Accounts, respectively, as of the Valuation Date immediately following the
Participant's retirement, death (while a Participant) or disability.

          Notwithstanding the foregoing, the vested balance of a Participant who
terminates employment prior to retirement, death, or disability which exceeds
$5,000 shall be paid in the 5-Year Payout method described in this Section
8.3(a)(2).

     (b)  Savings, Matched, Rollover and Profit-Sharing Accounts. The normal
form of payment to a Participant or Beneficiary shall be a lump sum.
Notwithstanding the previous sentence, the Participant may waive the normal lump
sum form of payment, and in that event, the Participant may elect one of the
following forms of payment of the balance of his Savings, Matched, Rollover and
Profit Sharing Accounts:

          (1)  Single Lump Sum. A single lump sum in cash;

          (2)  Installment Payments. Payments over a period certain in monthly,
quarterly, or annual cash installments. In order to provide such installment
payments, the Administrator may direct that the Participant's interest in the
Plan be segregated and invested separately, and that the funds in the segregated
account be used for the payment of the installments. The period over which such
installments are to be made shall be a fixed period and shall not extend beyond
the Participant's life expectancy (or the life expectancy of the Participant and
his designated Beneficiary).

          (3)  Part Lump Sum and Part Installments. As described above.

8.4  Multiple Beneficiary Designation. Subject to Paragraph 8.2, each
Participant may designate a Beneficiary or Beneficiaries of his own choosing and
may, in addition, designate one or more contingent Beneficiaries. If more than
one Beneficiary is designated, the Participant may specify the proportion which
shall be paid to each Beneficiary. Such designation shall be made in a form
satisfactory to the Administrator. Any Participant may revoke at any time his
designation of a Beneficiary or change his Beneficiary or Beneficiaries by
filing a written notice of such revocation or change with the Administrator.

8.5  Distributions of Bankshares Stock.

     (a)  Restrictions on Distributed Shares of Bankshares Stock. Shares of
Bankshares Stock held or distributed by the Trustee may be restricted as to sale
or transfer of such shares as the Employer may reasonably require in order to
assure compliance with applicable Federal and state securities laws, which
restrictions will be similarly applicable to all shares of stock. Except as
otherwise provided in subparagraphs 8.5(b) and (c) below, no shares of
Bankshares Stock held or

                                       40

<PAGE>

distributed by the Trustee may be subject to a put, call or other option, or
buy-sell or similar arrangement. The provisions of this Paragraph 8.5 shall
continue to be applicable to shares of Bankshares Stock even if the Plan ceases
to be an employee stock ownership plan under Code (S) 4975(e)(7).

     (b)  Right of First Refusal. All Bankshares Stock distributed out of this
Plan may be distributed with a right of first refusal, provided that Bankshares
Stock is not publicly traded at the time the right is exercised. Such right may
require that, before the Participant, his Beneficiary or any transferee sells
Bankshares Stock to any prospective buyer, the Plan be given the right to
purchase the Stock for an amount equal to the greater of (1) terms no less
favorable than those offered by the prospective bona fide buyer, or (2) the
value of the Bankshares Stock. This right of first refusal will expire at the
end of the fourteenth (14th) day after the holder of Bankshares Stock gives
written notice to the holder of the right that an offer by a third party to
purchase the Bankshares Stock has been received. For purposes of this Plan,
Bankshares Stock will be considered publicly traded if it is listed on a
registered national securities exchange or is quoted on a system sponsored by a
registered national securities exchange.

     (c)  Put Option. The Employer shall issue a put option to any Participant
who receives a distribution of Bankshares Stock, provided that the Bankshares
Stock is not publicly traded at the time of such distribution. The put option
shall permit the Participant to sell such Bankshares Stock to the Employer at
any time during two option periods, at the fair market value of such shares;
provided, however, that all such shares are so put, and provided further that
the Trust shall have the option to assume the rights and obligations of Resource
Bankshares at the time the put option is exercised. The first put option period
shall be for at least sixty (60) days beginning on the date of distribution. The
second put option period shall be for at least sixty (60) days beginning after
the new determination of the fair market value of Bankshares Stock by the Plan
Administrator (and notice to the Participant) in the following Plan Year. The
Plan Administrator may direct the Trustee to purchase shares of Bankshares Stock
tendered to the Employer under a put option. The payment for any Bankshares
Stock sold under a put option shall commence within thirty (30) days from the
date of the exercise of the put option and shall be made in a lump sum or in
substantially equal annual installments over a period not exceeding five (5)
years, with interest payable at a reasonable rate on any unpaid installment
balance, and adequate security shall be provided (all as determined by the Plan
Administrator).

8.6  Participant Right to Direct Rollover. Notwithstanding any provision of the
Plan to the contrary that would otherwise limit a distributee's election under
this Paragraph, a distributee may elect, at the time and in the manner
prescribed by the Administrator, to have any portion of an eligible rollover
distribution paid directly to an eligible retirement plan specified by the
distributee in a direct rollover.

                                       41

<PAGE>

     (a)  Definitions.

          (1)  Eligible Rollover Distribution: An eligible rollover distribution
is any distribution of all or any portion of the balance to the credit of the
distributee, except that any eligible rollover distribution does not include:
any distribution that is one of a series of substantially equal periodic
payments (not less frequently than annually) made for the life (or life
expectancy) of the distributee or the joint lives (or joint life expectancies)
of the distributee and the distributee's designated beneficiary, or for a
specified period of ten years or more; any distribution to the extent such
distribution is required under Code (S) 401(a)(9); the portion of any
distribution that is not includable in gross income (determined without regard
to the exclusion for net unrealized appreciation with respect to employer
securities); for distributions made after December 31, 1998, any hardship
distribution described in Code (S) 401(k)(2)(B)(i)(IV); and any other
distribution reasonably expected to total less than $200 during a year.

          (2)  Eligible Retirement Plan: An eligible retirement plan is an
individual retirement account described in Code (S) 408(a), an individual
retirement annuity described in Code (S) 408(b), an annuity plan described in
Code (S) 403(a), or a qualified trust described in Code (S) 401(a), that accepts
the distributee's eligible rollover distribution. However, in the case of an
eligible rollover distribution to the surviving spouse, an eligible retirement
plan is an individual retirement account or individual retirement annuity.

          (3)  Distributee: A distributee includes an Employee or former
Employee. In addition, the Employee's or former Employee's surviving spouse and
the Employee's or former Employee's spouse or former spouse who is the alternate
payee under a qualified domestic relations order, as defined in Code (S) 414(p),
are distributees with regard to the interest of the spouse or former spouse.

          (4)  Direct Rollover: A direct rollover is a payment by the Plan to
the eligible retirement plan specified by the distributee.

                                   ARTICLE IX

                               RIGHTS OF EMPLOYER

9.1  Right of Termination. The Plan is subject to change, in whole or in part,
by the Employer at any time and from time to time, or may be terminated at any
time by the Employer, and any Employer may suspend or discontinue contributions
at any time or times; provided, however, that no change shall be made in the
Plan which shall vest in any Employer directly or indirectly, any interest,
ownership or control in any assets of the Trust; and provided, further, that no
change may be made which would divest any amount theretofore vested in any
Participant. In the event of the termination or partial termination of the Plan,
or a permanent discontinuance of contributions by any Employer, a current
revaluation of the Trust assets shall be made in the manner provided in Article
VI, a current and final readjustment of the accounts of all affected
Participants shall be made as of the date of said revaluation in the manner
provided in Article VI, and the accounts of the Participants who are Employees
of the Employer taking such action shall thereupon be vested in

                                       42

<PAGE>

such Participants (except those whose accounts were forfeited since the
preceding Valuation Date), and the respective amounts therein shall be
distributed as provided in Paragraph 9.3.

9.2  Right of Amendment. Notwithstanding anything in Paragraph 9.1 to the
contrary, the Employer shall have the right at any time, and from time to time,
to amend this Plan in such manner as it may deem necessary or advisable, and any
such amendment may, by its terms, be retroactive.

     Notwithstanding anything hereinabove or in this Plan to the contrary, no
amendment to the Plan by the Employer shall decrease the accrued benefit of any
Participant; and any amendment by the Employer to the vesting schedule provided
in Paragraph 7.6 shall meet the following requirements:

     (a)  no such amendment shall reduce the nonforfeitable percentage of any
Participant's accrued benefit derived from Employer Contributions below that
percentage which existed prior to said amendment; and

     (b)  each Participant with three (3) or more Years of Service shall be
permitted to elect, within a reasonable period after the adoption of said
amendment, to have his nonforfeitable percentage computed under the Plan without
regard to such amendments.

9.3  Distribution of Funds Upon Plan Termination. In the event of the
termination or partial termination of the Plan or the complete discontinuance of
contributions hereunder by any Employer, the affected Participants of such
Employer shall become fully vested with all amounts credited to their accounts
at that time, and, if the Plan be discontinued in its entirety, each Participant
shall become fully vested with all amounts credited to his account at that time,
and the Trustee shall continue to hold such funds and Bankshares Stock as may
then be in their hands for the benefit of Participants and shall administer the
Trust, and distribute the same to Participants and Beneficiaries in the same
manner and at the times herein provided as though the Plan under which the Trust
exists had not terminated. Nothing in this paragraph shall be construed so as to
prevent the Trustee from liquidating the Trust earlier than as provided in this
paragraph, provided that the Plan shall have been discontinued, and the
Administrator determines that it is in the best interests of the Participants
that their credit balances be distributed to them at such earlier time.

9.4  No Contributions After Termination. Notwithstanding anything in the Plan or
in any trust agreement creating a trust forming a part of the Plan, no Employer
shall have any obligation after any termination of the Plan as to such Employer
to make any contribution under the Plan or to pay any expenses thereafter
incurred in connection with the Plan or any such trust.

                                       43

<PAGE>

                                    ARTICLE X

                                 ADMINISTRATION

10.1 Administrator. The Plan will be administered by an Administrator, which
position may be held by the Bank, an individual, or by a committee of two or
more persons, to be appointed by and to serve at the pleasure of the Board, or
in the absence of such appointment or in the event any person or committee so
appointed shall fail or cease to serve as such, the Administrator shall be
appointed by the Chief Executive Officer of the Bank. The Administrator may
resign by delivering a written resignation to the Bank, and any such resignation
shall take effect upon acceptance by the Bank.

10.2 Authority and Responsibilities of Administrator. The Administrator shall
have authority to control and manage, and shall be responsible for the control
and management of, the operation and administration of the Plan, subject to all
the provisions of the Plan (including any trust agreement or agreements relating
to any trust or trusts forming part of the Plan). The Administrator's
responsibilities shall also include computation and certification to the Trustee
of the amount of benefits payable hereunder to any retired or terminated
Employee, pensioner, joint annuitant or Beneficiary.

10.3 Named Fiduciary. The Administrator shall be a Named Fiduciary. The Bank
may, at any time or from time to time, designate one or more other persons as
Named Fiduciaries.

10.4 Allocation and Delegation. Any two or more Named Fiduciaries shall have the
authority to allocate between or among themselves any fiduciary responsibilities
(other than trustee responsibilities) of such Named Fiduciaries. Any Named
Fiduciary shall have the authority to delegate any of his fiduciary
responsibilities (other than trustee responsibilities) to such person or persons
as such Named Fiduciary may choose.

10.5 Agents of the Administrator. The Administrator or any Named Fiduciary may
authorize any agent to execute or deliver any instrument, instruction, notice or
other document to any Employer, Trustee, Employee, former Employee, pensioner,
joint annuitant, Beneficiary or other person.

10.6 Indemnity. Any Employee to whom fiduciary responsibility is delegated shall
be protected by the Employer, to the extent allowed by law, from all liability
growing out of any act, or failure to act, in good faith or any negligence,
breach of fiduciary duty, misfeasance, malfeasance, nonfeasance or other breach
of any duty by such Employee or by any person or persons to whom the
Administrator or any Named Fiduciary delegates any authority, fiduciary or
otherwise; provided, however, that an Employee who is appointed the
Administrator or Named Fiduciary shall not be so protected from any such
liability where such Employee acts in bad faith in condoning or concealing such
breach or in appointing such person or persons or in delegating such authority.
Any insurance to cover such obligation to indemnify shall be at the expense of
the Employer.

10.7 Actions of the Administrator and Named Fiduciaries. All actions and
decisions of the Administrator or any Named Fiduciary, or of any other person or
persons to whom the Administrator or any Named Fiduciary delegates any authority
or responsibility, acting individually or collectively, shall be appropriately
documented or stated in writing, and, where any such action

                                       44

<PAGE>

or decision is made by more than one person, any such writing shall be signed by
those persons making, acquiescing in, or authorizing the action or decision
concerned.

10.8 Disputed Questions. The Administrator shall appoint a Committee, composed
of three or more persons, who may construe the Plan, correct any defect, supply
any deficiency and reconcile any inconsistency in such manner and to such extent
as the Committee may deem expedient to carry out the purposes of the Plan and
shall decide any disputed questions respecting the rights of Participants and
their Beneficiaries under the Plan. Any action or decision taken or concurred in
by a majority of the members of the Committee shall be the act or decision of
the Committee.

10.9 Benefit Claims Procedures. In the event any claim by a Participant, former
Participant, or Beneficiary is denied as to the amount and/or the method of
payment under the Plan, such Participant, former Participant, or Beneficiary
shall be given prompt notice in writing of such denial, which notice shall set
forth the reason for the denial. The Participant, former Participant, or
Beneficiary may, by filing notice in writing with the Administrator within sixty
(60) days after the date of such notice of denial, request review of such
denial. The Administrator shall review such denial, and may, at his discretion,
and shall, upon written request by the Participant, former Participant,
Beneficiary or any Employer submit the question to the Committee which shall
consider the same. The Administrator or the Committee, as appropriate, shall
state his or its decision, in writing, to the Participant, former Participant or
Beneficiary concerned, and, if considered by the Committee, to the
Administrator.

10.10 Actions of the Administrator. All interpretations, determinations, actions
and decisions of the Administrator (subject only to those questions which are
required to be submitted to the Committee) or any Named Fiduciary shall be
final, conclusive, and binding as to all interested parties.

10.11 Reliance on Reports and Certificates. The Administrator, any Named
Fiduciary, the Committee and each person to whom any fiduciary responsibility is
delegated shall be entitled to rely conclusively upon any information furnished
by any Employer, Participant, former Participant, Beneficiary, Trustee,
accountant, controller, attorney, actuary, consultant or other advisor and any
agent or employee of the foregoing, as the case may be.

10.12 Compensation. Neither the Administrator, any Named Fiduciary, any member
of the Committee nor anyone else exercising fiduciary responsibilities shall
receive any compensation for services as such except as expressly determined by
the Bank. The Bank shall pay or reimburse the Administrator and any such other
persons, for any expenses, liabilities or obligations incurred in good faith in
the performance of their duties.

10.13 Service of Process. The Administrator shall be the authorized agent for
receipt, on behalf of the Plan, of any legal process directed to the Plan.

                                       45

<PAGE>

                                   ARTICLE XI

                       AUTHORITY AND POWERS OF THE TRUSTEE

11.1 Relationship with Third Parties. In the exercise of any of the powers
herein vested in the Trustee, the Trustee may consult with and act upon the
advice of any Employer and may rely completely upon any certificate, statement,
finding or decision made by any Employer (or its Board) concerning any material
fact or matter. The Trustee may in like manner rely upon any action, advice,
decision or direction of the Administrator. No person, firm or corporation
dealing with any Trustee shall have the duty to inquire whether such Trustee is,
or is not, acting with the approval of the Employer, the Participants or the
Administrator, or to see to the application of any money or property paid or
delivered to the Trustee.

11.2 Accounting. On or before the first day of the fourth month of each Plan
Year, the Trustee shall prepare and furnish to the Employer and the
Administrator an accounting of his transactions for the prior Plan Year and a
complete list of the assets held in the Trust by such Trustee as of (i) the last
preceding Valuation Date, in the case of all Trust assets other than the Funds,
and (ii) in the case of the Funds, as of the last Valuation Date of the prior
Plan Year. Upon the expiration of ninety (90) days from the filing of such
accountings by the Trustee, such accountings shall be final and conclusive as to
the Employer and all persons claiming by, through or under the Plan with respect
to any item or thing fairly shown by said accountings and not objected to by the
Employer in a writing delivered to the Trustee within said ninety (90) day
period.

11.3 Compensation. The compensation of the Trustee shall be determined by
agreement between the Bank and the Trustee. Expenses for legal or other services
may, at the discretion of the Bank, be paid either by the Trustee out of the
income or principal of the Trust or by the Bank.

11.4 Powers and Duties of the Trustee. In extension and not in limitation of the
powers given to the Trustee by law, or by other provisions of this Plan, the
Trustee shall have the following powers and duties:

     (a)  To discharge the Trustee's duties with respect to the Plan solely in
the interest of the Participants and Beneficiaries and (1) for the exclusive
purpose of: (A) providing benefits to Participants and their Beneficiaries, and
(B) defraying reasonable expenses of administering the Trust; (2) with the care,
skill, prudence, and diligence under the circumstances then prevailing that a
prudent man acting in a like capacity and familiar with such matters would use
in the conduct of an enterprise of a like character and with like aims; (3) by
diversifying the investments of the Plan so as to minimize the risk of large
losses, unless under the circumstances it is clearly prudent not to do so; and
(4) in accordance with this document and instruments governing the Plan insofar
as such documents and instruments are consistent with the provisions of Title I
of the Employee Retirement Income Security Act of 1974; provided, however, that
the diversification requirement of clause (3) and the prudence requirement of
clause (2) to the extent it requires diversification, shall not be violated by
the acquisition or holding of Bankshares Stock.

                                       46

<PAGE>

         (b)   To invest and reinvest the principal and income of the trust fund
and keep the trust fund invested, without distinction between principal and
income, in Bankshares Stock or other assets. All purchases of Bankshares Stock
shall be made at prices which, in the judgment of the Administrator, do not
exceed the fair market value thereof. The Trustee may invest in such securities
other than Bankshares Stock or in such property, wherever situated, as the
Trustee may deem advisable including, but not limited to, any obligation of the
United States of America, any state or commonwealth of the United States of
America or any city therein, stocks (whether common or preferred), bonds,
mortgages, debentures, notes or other evidences of indebtedness or ownership in
any corporation, mutual fund, investment company, association or business trust
and participation certificates in any common trust fund now in existence or
hereafter created. The Trustee may hold such portion of the assets uninvested as
shall be reasonable under the circumstances pending investment or disbursement.
In making such investments the Trustee shall not be limited to that class of
investments which are defined or deemed as legal investments for trust funds
under the laws of the Commonwealth of Virginia. The Trustee may also purchase
from any insurance company or insurance companies life insurance contracts,
retirement annuity contracts, retirement income contracts, a group annuity
policy or other contracts or policies issued by an insurance company in such
amounts and with such terms and conditions, not inconsistent with the provisions
of the Plan and the Trust, as the Trustee may deem advisable for the purpose of
providing in whole or in part the benefits to which the Participants may be
entitled under the provisions of the Plan and the Trust; provided, however, that
the aggregate premiums paid on account of any Participant for the purchase of
life insurance shall be less than 50% of the aggregate Employer contributions
credited to such Participant's account at any particular time, and provided
further, that the Trustee shall convert the entire value of the life insurance
contract so purchased into cash or periodic income at or before retirement of
the Participant for whom it was purchased, or shall distribute the contract in
kind to such Participant at or before such time, so that no portion of the value
of such contract may be used to continue life insurance protection for the
Participant beyond his retirement.

         (c)   To sell, exchange, convey, transfer or dispose of, and also to
grant options with respect to, any securities or property, whether real or
personal, at any time held by it, and any sale may be made by private contract
or by public auction, for cash or upon credit, or partly both, as the Trustee
may deem best.

         (d)   To borrow money with or without mortgaging the Trust assets.

         (e)   To retain, manage, operate, repair and improve, and to mortgage
and/or lease, for any period, any real estate held by the Trustee.

         (f)   To compromise, compound and settle any debt or obligation due to
or from the Trustee, and to reduce the rate of interest on, extend or otherwise
modify, foreclose upon default or otherwise enforce, or to refrain from
enforcement of, any such obligation.

         (g)   To submit to final arbitration any matter of difference with
others.

         (h)   To hold in bearer form any securities constituting property of
the Trust, or to cause the same to be issued, held or registered in the name of
the Trustee or any nominee of the Trustee.

                                       47

<PAGE>

         (i)   To consent to, or to oppose, the reorganization, consolidation,
readjustment of the financial structure, or sale of the assets, of any
corporation or other organization the securities or obligations of which
constitute property of the Trust, and to take any action with reference to such
securities or obligations which, in the opinion of the Trustee, is necessary to
obtain the benefit of any such reorganization, consolidation, readjustment or
sale, and to accept and hold any securities or other obligations resulting from
any such reorganization, consolidation, readjustment or sale.

         (j)   To execute proxies and to exercise any voting right, conversion
privilege, subscription right, or other privilege in respect of any securities
constituting property of the Trust.

         (k)   To sue in any court of competent jurisdiction for the enforcement
of any contract, claim, or other right of the Trustee, to defend against any
claim or suit brought against the Trustee, and to compromise, settle or
otherwise dispose of any such claim or suit by or against the Trustee.

         (l)   To adopt such rules and regulations with respect to the
administration of the Trust as are consistent with the terms of this Plan, which
rules and regulations shall be binding upon the Trustee, the Employer and the
participating Employees and their Beneficiaries.

         (m)   To make payments out of the Trust to such persons (including the
Administrator) in such manner and amounts for purposes of payment of benefits
and expenses of administration as the Administrator directs in writing. Where a
distribution is made in Bankshares Stock, the Trustee shall cause an appropriate
certificate to be issued and delivered to the person entitled thereto. The
Trustee understands that even though shares of Bankshares Stock may be
registered under the Securities Act of 1933 as amended (the Securities Act), he
shall (a) acquire the shares of Bankshares Stock for the account of the Trust,
for investment purposes and not with a view to, or for, sale in connection with
any distribution thereof, and he shall not distribute or resell the shares of
Bankshares Stock or any part of them except as provided under the Plan; and (b)
except after receiving the written election of a Participant or his Beneficiary,
shall not sell, transfer, assign, or otherwise dispose of any of the shares of
Bankshares Stock in the absence of (i) an effective registration statement under
the Securities Act, (ii) an opinion of counsel, satisfactory to the Trustee and
the Employer that registration is not required under one of the exemptions
provided for under the Securities Act including but not limited to the exemption
provided by and under Rule 144 under the Securities Act (or similar rule in
effect at the time of receipt of the shares of Bankshares Stock by the
Participant, or his Beneficiary), or (iii) a "no action" letter with respect to
the proposed disposition has been received from the Securities and Exchange
Commission. The stock certificate evidencing the shares shall bear a restrictive
legend against transfer in accordance with the foregoing provision and a
Participant or his Beneficiary who is to receive shares of Bankshares Stock
shall represent in writing to the Trustee, immediately prior to or at the time
of receipt of shares of Bankshares Stock, that he will abide by the foregoing
provision and that he will not distribute or resell such shares or any part of
them without first complying with the terms of Paragraph 8.5 of the Plan.

               In the event the Trustee invests any part of the Fund, pursuant
to the purpose of the Plan, in shares of Bankshares Stock and the Trustee is
thereafter directed to dispose of such investment, or any part thereof, under
circumstances which, in the opinion of counsel for the Trustee, require
registration of the securities under the Securities Act and/or qualification of
the securities under the Blue Sky laws of any state or states, then the
Employer, at its own expense, will

                                       48

<PAGE>

take or cause to be taken any and all such action as may be necessary or
appropriate to effect such registration and/or qualification.

     (n)   The Trustee shall not hold any Employer real property which is not
qualified Employer Real Property.

     (o)   The Trustee shall not acquire any qualified Employer Real Property in
excess of the applicable legal limits.

     (p)   The Trustee shall not engage in any prohibited transactions involving
parties in interest.

     (q)   Subject to the provisions and limitations specifically set forth in
this Plan, to do all other acts and things which in the judgment of the Trustee
may be necessary or desirable for the proper and advantageous management of the
Trust, and the preservation of its property, in the same manner and to the same
extent as an individual might or could do with respect to his own property.

11.5 ESOP Loans. The Administrator may direct the Trustee to incur ESOP Loans,
as hereinafter defined, from time to time to finance the acquisition of
Bankshares Stock (Financed Shares) for the Trust or to repay a prior ESOP Loan.
An installment obligation incurred in connection with the purchase of Bankshares
Stock shall constitute an ESOP Loan. An ESOP Loan shall be for a specific term,
shall bear a reasonable rate of interest and shall not be payable on demand
except in the event of default. An ESOP Loan may be secured by a collateral
pledge of the Financed Shares so acquired. No other Trust assets may be pledged
as collateral for an ESOP Loan, and no lender shall have recourse against Trust
assets other than any Financed Shares remaining subject to pledge. Any pledge of
Financed Shares must provide for the release of shares so pledged on a pro rata
basis as principal repayments on the ESOP Loan are made by the Trustee and such
Financed Shares are allocated to Participants' Stock Accounts (as provided in
Paragraph 5.2). Repayments of principal and interest on any ESOP Loan shall be
made by the Trustee (as directed by the Administrator) only from Employer
contributions paid in cash to enable the Trustee to repay such Loan, from
earnings attributable to such Employer Contributions and from any cash dividends
received by the Trust on such Financed Shares.

11.6 Removal of Trustee. The Board may remove any Trustee by giving written
notice of such removal to such Trustee, to take effect not less than sixty (60)
days after mailing or delivery of such notification, unless notice of a shorter
duration shall be accepted by the Trustee as adequate. Any Trustee may resign by
giving written notice of his resignation to the Bank. In the event of the
removal, resignation, death, incapacity, or any other failure to serve, of a
Trustee, the Board shall appoint a successor or successors, but if the Board
fails to appoint a successor, any person in interest may petition a court of
competent jurisdiction to appoint a successor Trustee to act until a successor
has been appointed by the Board. Within sixty (60) days after any removal,
resignation or other termination of a Trustee's services, such Trustee shall
file with each Employer a final accounting of the form specified in Paragraph
11.2, and upon the expiration of ninety (90) days after the filing of such
accounting, such accounting shall be final and conclusive with respect to any
item or thing fairly shown thereby and not objected to in writing by any
Employer or the successor Trustee within said ninety (90) day period. Each
successor Trustee shall accept and acknowledge his appointment

                                       49

<PAGE>

in writing. Such Trustee shall have all the duties, powers, responsibilities and
discretions herein given to the original Trustee.

11.7  Acting for the Trustee. If more than one (1) Trustee is serving hereunder,
any Trustee may, with the approval of a majority of Trustees, act for the Trust,
and his signature on any paper shall be deemed to be the signature of the
Trustees acting jointly. In the case of any Bank account held in the name of the
Trust, the signature of any Trustee shall be sufficient signature for any check
drawn upon such account.

11.8  Expenses of Trust.  Unless otherwise  directed by the Bank, all expenses
of administering  the Trust shall be paid out of the Trust.

11.9  Investment Manager. The Board may, from time to time, appoint an
investment manager, as defined by (S) 3(38) of ERISA, who shall have authority
to effect purchases, disposition and exchanges of assets comprising the Trust as
such investment manager considers appropriate and advisable. During the period
of such appointment, the Trustee shall be subject to the proper directions of
such investment manager that are made in accordance with the terms of the Plan
and applicable law. The instructions of the investment manager shall either be
in writing or subsequently confirmed in writing. The investment manager must
acknowledge in writing to the Trustee and the Board the acceptance of such
appointment and that it is a fiduciary with respect to the Plan. The investment
manager shall be solely responsible for the acquisition, disposition and
management of the assets of the Plan and the Trustee shall not be liable for the
acts or omissions of the investment manager.

                                   ARTICLE XII

                      PROVISIONS RELATING TO TOP-HEAVY PLAN

      Notwithstanding anything hereinabove to the contrary, if the Plan is a
Top-Heavy Plan as determined pursuant to Code (S) 416 for any Plan Year then the
Plan shall meet the following requirements for any such Plan Year:

      (a)  Minimum Vesting Requirements. Vesting with respect to contributions
made in and earnings accrued during such Plan Year shall be determined in
accordance with the following schedule:

                 Years of Service                Vested Interest
                 -----------------               ---------------

                 Less than 2 years                      0%

                 2 or more                            100%

      (b)  Minimum Contribution Requirement. It is intended that the Employer
will meet the minimum benefit and contribution requirements of Code (S) 416(c).
If a minimum benefit is not provided under a defined benefit plan maintained by
the Employer, then this Plan will provide a minimum contribution allocation
(which may include forfeitures otherwise allocable) for such Plan

                                       50

<PAGE>

Year for each non-key Participant who has not separated from service at the end
of the Plan Year, regardless of whether such Participant completes 1,000 Hours
of Service during the Plan Year and regardless of such Participant's level of
compensation, in an amount equal to at least three percent (3%) of such
Participant's Compensation for such Plan Year less any contribution for the
Participant to any other defined contribution plan for the Plan Year concerned.
Such three percent (3%) minimum contribution requirement shall be increased to
four percent (4%) for any year in which the Employer also maintains a defined
benefit pension plan if necessary to avoid the application of Code ss.
416(h)(1), relating to special adjustments to the Code (S) 415 limits for top
heavy plans, if the adjusted limitations of Code (S) 416(h)(1) would otherwise
be exceeded if such minimum contribution were not so increased.

          The minimum contribution requirements set forth hereinabove shall be
reduced in the following circumstances:

          (1) The percentage minimum contribution required hereunder shall in no
event exceed the percentage contribution made for the key employee for whom such
percentage is the highest for the Plan Year after taking into account
contributions or benefits under other qualified plans in this Plan's aggregation
group as provided pursuant to Code (S) 416(c)(2)(B)(ii); and

          (2) No minimum contribution will be required for a Participant under
this Plan for any Plan Year if the Employer maintains another qualified plan
under which a minimum benefit or contribution is being accrued or made for such
year for the Participant in accordance with Code (S) 416(c).

                                  ARTICLE XIII

                            MISCELLANEOUS PROVISIONS

13.1  No Guarantee of Employment. Nothing herein contained shall be deemed to
give to any Employee the right to be retained in the employ of any Employer, the
Employer hereby reserving the right to discharge any Employee at any time with
or without cause, and any Employee so discharged shall have only such rights or
interests in this Trust as may be specifically provided for herein.

13.2  Severability. In the event any provision contained in this Plan shall be
held illegal or invalid for any reason, such illegality or invalidity shall not
affect the remaining parts of the Plan, but the Plan shall be construed and
enforced as if such illegal or invalid provision had never been inserted
therein.

13.3  No Right of Action By Reason of Plan. Neither the establishment of the
Plan nor any modification thereof nor the creation of any fund or account or the
payment of any benefit shall be construed as giving to any Participant or any
other person whomsoever any legal or equitable right against any Employer or any
Trustee unless such right shall be specifically provided for in the Plan or by
applicable law.

                                       51

<PAGE>

13.4  Non-Alienation of Benefits. Subject to Paragraph 13.5 and to the extent
permitted by law, no benefits payable under the Plan will be subject in any
manner to anticipation, assignment, pledge or other alienation or to attachment,
garnishment, levy or other sequestration; and any attempt thereat shall be void;
and no benefits will be in any manner liable for or subject to the debts,
liabilities, engagements, or torts of any Participant, former Participant or
Beneficiary; and if any Participant, former Participant or Beneficiary is
adjudicated bankrupt or attempts to anticipate, assign or pledge any benefits,
then such benefits will, in the discretion of the Administrator, cease and the
Administrator shall cause the same to be held and applied to or for the benefit
of such Participant, former Participant, Beneficiary or his or her spouse,
children or other dependents, or any of them, in such manner and in such
proportion as the Administrator may determine; provided, however, that nothing
herein shall be construed to deprive any Employer of any remedy otherwise
available to it, by attachment, garnishment, levy or other sequestration,
against any Participant, former Participant or Beneficiary or any property or
right of any of them for the enforcement and collection of any debt or other
obligation of any Participant, former Participant or Beneficiary.

13.5  Qualified Domestic Relations Orders. Notwithstanding the provisions of
Paragraph 13.4, in the case of any domestic relations order received by the
Administrator, the Administrator shall: (1) notify the Participant and any
alternate payee named in such order of the Administrator's receipt of such order
and the Plan's procedures for determining its status as a "qualified domestic
relations order," as defined by Code (S) 417; (2) permit any such alternate
payee to designate a representative for receipt of copies of notices sent to the
alternate payee with respect to such order; (3) within a reasonable time after
receipt, determine whether such order is a qualified domestic relations order in
accordance with written procedures established for that purpose; and (4) notify
the Participant and each alternate payee of such determination. The
Administrator shall provide for the payment of a Participant's benefits under
the Plan to such alternate payee in accordance with the terms and requirements
of an order which the Administrator determines to be a qualified domestic
relations order and at the time specified in such order; provided, however, that
the alternate payee designated in such order shall not receive any type, form or
optional benefit not otherwise provided under the Plan, nor shall the Plan
provide any increased (determined on the basis of actuarial value) benefits to
the Participant, his alternate payee, or both, by virtue of such order. During
any period in which the issue of whether a domestic relations order is
"qualified" pursuant to Code (S) 417 is being determined, the Administrator
shall segregate in a separate account the amounts which would have been payable
to the alternate payee during such period if the order had been qualified on the
date of its receipt. If within eighteen (18) months from such date the order is
determined to be: (a) qualified, the Administrator shall pay the segregated
amounts (plus interest) to the person(s) entitled thereto; or (b) not qualified,
or the issue as to its qualification is still unresolved at the end of 18
months, the Administrator shall pay the segregated amounts (plus interest) to
the Participant or Beneficiary who would have been entitled to such amounts if
there had been no order. Any determination that an order is qualified which is
made after the close of the 18 month period referred to above shall be applied
prospectively only.

13.6  Evidence of Survival. If the Administrator is unable within two (2) years
after the Account becomes payable, to make payment because the identity or
whereabouts of the person or persons to receive payment cannot be ascertained,
the Administrator, at the end of such two-year period, may direct that payment
be made to such designated Beneficiary or Beneficiaries of the Participant or

                                       52

<PAGE>

former Participant as may be found and living at such time, or if no such living
beneficiary is found at such time, to the spouse of the Participant or former
Participant if found and living at such time.

13.7  Action By or For Employer. To the extent that the charter or bylaws of any
Employer or any resolution of the Board of any Employer so authorize or permit,
any Executive Committee, other Committee or officer of such Employer may, for
the purposes of this Plan, act for, or in the stead of, such Employer or the
Board of such Employer.

13.8  Adoption of Plan by Related Entities. Any other corporation (herein called
a related corporation) at least eighty percent (80%) of whose capital stock is
owned by one or more of the corporations which have adopted the Plan, and/or one
or more of the stockholders of such corporations, or any sole proprietorship or
partnership (related organization) may adopt the Plan as a stock ownership plan
for the benefit of the Employees of such corporation or related organization by
resolution of the Board and of such other corporation or related organization.
Notwithstanding any other provision of this Plan, if a Participant is
transferred from employment by one Employer to employment by another Employer,
or a related corporation or organization (whether or not such related
corporation or organization has adopted this Plan), or if a Participant's
employment by any Employer is terminated and immediately following such
termination such Participant is employed by another Employer, or any such
related corporation or organization, such Participant shall be deemed not to
have a Break in Service for the purpose of this Plan, and such Participant shall
continue to participate in the Plan subject to the provisions hereof. Such
Participant shall share in the contributions made by his Employer or Employers
on the basis of such Participant's Compensation during the period of employment
by each such Employer. With respect to any period in which such Participant is
employed by a related corporation or organization which is not an Employer
(i.e., has not adopted this Plan or has discontinued this Plan for its
Employees), such Participant shall not share in the contributions of any
Employer.

13.9  Non-Diversion of Trust Funds. All property and assets of the Trust,
including income from investments and from all other sources, shall be for the
exclusive benefit of Participants and their Beneficiaries and shall be used to
pay benefits provided hereunder or to pay expenses of administration to the
extent not paid by the Employer.

13.10 Payment to Minors and Incompetents. If a Participant, former Participant
or Beneficiary entitled to receive any benefits hereunder is a minor or is
deemed by the Administrator or is adjudged to be legally incapable of giving
valid receipt and discharge for such benefits they may be paid to such person or
persons as the Administrator may designate or to a duly appointed personal
representative of such Participant, former Participant or Beneficiary.

13.11 Merger. This Plan shall not merge or consolidate with, or transfer its
assets or liabilities to, any other plan unless each Participant in the Plan
would (if the plan be then terminated) receive a benefit immediately after the
merger, consolidation or transfer which is equal to or greater than the benefit
he would have been entitled to receive immediately before the merger,
consolidation or transfer (if the Plan had then terminated). No other Plan
subject to the minimum funding standards of Code (S) 412 (i.e., money purchase
pension, target benefit or defined benefit plans) shall be merged or
consolidated into, or have its assets or liabilities transferred to, this Plan
unless this Plan is, at the time of such merger, transfer or consolidation,
amended to provide the survivors' annuities required by Code (S) 417.

                                       53

<PAGE>

13.12   Plan Not Effective Unless Approved. Notwithstanding anything in the Plan
to the contrary, if the Internal Revenue Service initially, or upon any
amendment to the Plan, shall fail or refuse to issue its determination that the
Trust, which forms a part of the Plan, is a qualified trust under Code (S)
401(a), then, at the election of the Bank, the Plan may be terminated, and upon
such termination all contributions shall be returned to the Bank, or the Plan
may be subject to any amendments as may be necessary to obtain a determination
that the Trust is a qualified trust under Code (S) 401(a).

13.13   Use of Pronouns. Whenever used herein, the masculine pronouns shall
include the feminine, the feminine shall include the masculine, the singular
shall include the plural and the plural shall include the singular, unless the
context otherwise requires.

13.14   Governing Law. The provisions of the Plan shall, except as otherwise
required by the statutes of the United States of America, be construed according
to the laws of the Commonwealth of Virginia.

        IN WITNESS WHEREOF, the Bank and the Trustee have caused this Plan to
be signed in their names as of the day and year first above written. This
Agreement may be signed in counterparts, each of which shall be an original,
with the same effect as if the signatures thereto and hereto were upon the same
instrument.

                                      RESOURCE BANK

Date: February ___, 2002        By:   ______________________________

                                Title:______________________________

                                      RESOURCE BANKSHARES CORPORATION

Date: February ___, 2002        By:   ______________________________

                                Title:______________________________

                                      CW & CO. OF VIRGINIA

Date: February ___, 2002        By:   ______________________________

                                Title:______________________________

                                      RESOURCE SERVICE CORPORATION

Date: February ___, 2002        By:   ______________________________

                                Title:______________________________

                                       54

<PAGE>

                                      PRC TITLE, LLP

Date: February ___, 2002        By:   ______________________________

                                Title:______________________________

                                       55

<PAGE>

                                     EGTRRA
                                AMENDMENT TO THE
                   RESOURCE BANK STOCK AND 401(K) SAVINGS PLAN

<PAGE>

                                    SECTION I
                                    PREAMBLE

1.1      Adoption and effective date of amendment. This amendment of the
         Resource Bank Stock and 401(k) Savings Plan (the "Plan") is adopted to
         reflect certain provisions of the Economic Growth and Tax Relief
         Reconciliation Act of 2001 ("EGTRRA"). This amendment is intended as
         good faith compliance with the requirements of EGTRRA and is to be
         construed in accordance with EGTRRA and guidance issued thereunder.
         Except as otherwise provided, this amendment shall be effective as of
         the first day of the first plan year beginning after December 31, 2001.

1.2      Supersession of inconsistent provisions. This amendment shall supersede
         the provisions of the Plan to the extent those provisions are
         inconsistent with the provisions of this amendment.

                                   SECTION II
                              INVOLUNTARY CASH-OUTS

2.1      Applicability and effective date. Inasmuch as the Plan provides for
         involuntary cash-outs of amounts less than $5,000, this Section shall
         apply for distributions made after December 31, 2001, and shall apply
         to all participants. However, regardless of the preceding, this Section
         shall not apply if the Plan is subject to the qualified joint and
         survivor annuity requirements of Sections 401(a)(11) and 417 of the
         Code.

2.2      Rollovers not to be disregarded in determining value of account balance
         for involuntary distributions. For purposes of the sections of the Plan
         that provide for the involuntary distribution of vested accrued
         benefits of $5,000 or less, the value of a participant's nonforfeitable
         account balance shall be determined including that portion of the
         account balance that is attributable to rollover contributions (and
         earnings allocable thereto) within the meaning of Sections 402(c),
         403(a)(4), 403(b)(8), 408(d)(3)(A)(ii), and 457(e)(16) of the Code. If
         the value of the participant's nonforfeitable account balance as so
         determined is $5,000 or less, then the Plan shall immediately
         distribute the participant's entire nonforfeitable account balance in
         accordance with the terms of the Plan.

                                   SECTION III
                             HARDSHIP DISTRIBUTIONS

 3.1     Applicability and effective date. Inasmuch as the Plan provides for
         hardship distributions upon satisfaction of the safe harbor (deemed)
         standards as set forth in Treas. Reg. Section 1.401(k)-1(d)(2)(iv),
         this Section shall apply for calendar years beginning after 2001.

3.2      Suspension period following hardship distribution. A participant who
         receives a distribution of elective deferrals after December 31, 2001,
         on account of hardship shall be prohibited from making elective
         deferrals and employee contributions under this and all other plans of
         the employer for 6 months after receipt of the distribution.
         Furthermore, a participant who receives a distribution of elective
         deferrals in calendar year 2001 on account of hardship shall be
         prohibited from making elective deferrals and employee contributions
         under this and all other plans until the later of January 1, 2002, or 6
         months after receipt of the distribution.

                                   SECTION IV
                             CATCH-UP CONTRIBUTIONS

4.1      Catch-up Contributions. All employees who are eligible to make elective
         deferrals under the Plan and who have attained age 50 before the close
         of the plan year shall be eligible to make catch-up contributions in
         accordance with, and subject to the limitations of, Section 414(v) of
         the Code. Such catch-up contributions shall not be taken into account
         for purposes of the provisions of the Plan implementing the required
         limitations of Sections 402(g) and 415 of the Code. The Plan shall not
         be treated as failing to satisfy the provisions of the Plan
         implementing the requirements of Section 401(k)(3), 401(k)(11),
         401(k)(12), 410(b), or 416 of the Code, as applicable, by reason of the
         making of such catch-up contributions.

4.2      Matching of Catch-up Contributions. Catch-up contributions will be
         matched to the same extent and in the same manner as elective deferrals
         under the Plan.

                                    SECTION V
                         INCREASE IN COMPENSATION LIMIT

Increase in Compensation Limit. The annual compensation of each participant
taken into account in determining allocations for any plan year beginning after
December 31, 2001, shall not exceed $200,000, as adjusted for cost-of-living
increases in accordance with Section 401(a)(17)(B) of the Code. Annual
compensation means compensation during the plan year or such

                                       1

<PAGE>

other consecutive 12-month period over which compensation is otherwise
determined under the Plan (the determination period).The cost-of-living
adjustment in effect for a calendar year applies to annual compensation for the
determination period that begins with or within such calendar year.

                                   SECTION VI
             LIMITATIONS ON CONTRIBUTIONS (CODE SECTION 415 LIMITS)

6.1      Effective date. This Section shall be effective for limitation years
         beginning after December 31, 2001.

6.2      Maximum annual addition. Except to the extent permitted under Section
         IV of this amendment and Section 414(v) of the Code, if applicable, the
         annual addition that may be contributed or allocated to a participant's
         account under the Plan for any limitation year shall not exceed the
         lesser of:

         a.    $40,000, as adjusted for increases in the cost-of-living under
               Section 415(d) of the Code, or

         b.    100 percent of the participant's compensation, within the
               meaning of Section 415(c)(3) of the Code, for the limitation
               year.

         The compensation limit referred to in b. shall not apply to any
         contribution for medical benefits after separation from service (within
         the meaning of Section 401(h) or Section 419A(f)(2) of the Code) which
         is otherwise treated as an annual addition.

                                   SECTION VII
                         MODIFICATION OF TOP-HEAVY RULES

7.1      Effective date. This Section shall apply for purposes of determining
         whether the Plan is a top-heavy plan under Section 416(g) of the Code
         for plan years beginning after December 31, 2001, and whether the Plan
         satisfies the minimum benefits requirements of Section 416(c) of the
         Code for such years. This Section amends the top-heavy provisions of
         the Plan.

7.2      Determination of top-heavy status.

7.2.1    Key employee. Key employee means any employee or former employee
         (including any deceased employee) who at any time during the plan year
         that includes the determination date was an officer of the employer
         having annual compensation greater than $130,000 (as adjusted under
         Section 416(i)(1) of the Code for plan years beginning after December
         31, 2002), a 5-percent owner of the employer, or a 1-percent owner of
         the employer having annual compensation of more than $150,000. For this
         purpose, annual compensation means compensation within the meaning of
         Section 415(c)(3) of the Code. The determination of who is a key
         employee will be made in accordance with Section 416(i)(1) of the Code
         and the applicable regulations and other guidance of general
         applicability issued thereunder.

7.2.2    Determination of present values and amounts. This Section 10.2.2 shall
         apply for purposes of determining the present values of accrued
         benefits and the amounts of account balances of employees as of the
         determination date.

         a.    Distributions during year ending on the determination date. The
               present values of accrued benefits and the amounts of account
               balances of an employee as of the determination date shall be
               increased by the distributions made with respect to the
               employee under the Plan and any plan aggregated with the Plan
               under Section 416(g)(2) of the Code during the 1-year period
               ending on the determination date. The preceding sentence shall
               also apply to distributions under a terminated plan which, had
               it not been terminated, would have been aggregated with the
               Plan under Section 416(g)(2)(A)(i) of the Code. In the case of
               a distribution made for a reason other than separation from
               service, death, or disability, this provision shall be applied
               by substituting "5-year period" for "1-year period."

         b.    Employees not performing services during year ending on the
               determination date. The accrued benefits and accounts of any
               individual who has not performed services for the employer
               during the 1-year period ending on the determination date
               shall not be taken into account.

7.3      Minimum benefits.

7.3.1    Matching contributions. Employer matching contributions shall be taken
         into account for purposes of satisfying the minimum contribution
         requirements of Section 416(c)(2) of the Code and the Plan. The
         preceding sentence shall apply with respect to matching contributions
         under the Plan or, if the Plan provides that the minimum contribution
         requirement shall be met in another plan, such other plan. Employer
         matching contributions that are used to satisfy the

                                       2

<PAGE>

         minimum contribution requirements shall be treated as matching
         contributions for purposes of the actual contribution percentage test
         and other requirements of Section 401(m) of the Code.

7.3.2    Contributions under other plans. The employer may provide, in an
         addendum to this amendment, that the minimum benefit requirement shall
         be met in another plan (including another plan that consists solely of
         a cash or deferred arrangement which meets the requirements of Section
         401(k)(12) of the Code and matching contributions with respect to which
         the requirements of Section 401(m)(11) of the Code are met). The
         addendum should include the name of the other plan, the minimum benefit
         that will be provided under such other plan, and the employees who will
         receive the minimum benefit under such other plan.

                                  SECTION VIII
                                DIRECT ROLLOVERS

8.1      Effective date. This Section shall apply to distributions made after
         December 31, 2001.

8.2      Modification of definition of eligible retirement plan. For purposes of
         the direct rollover provisions of the Plan, an eligible retirement plan
         shall also mean an annuity contract described in Section 403(b) of the
         Code and an eligible plan under Section 457(b) of the Code which is
         maintained by a state, political subdivision of a state, or any agency
         or instrumentality of a state or political subdivision of a state and
         which agrees to separately account for amounts transferred into such
         plan from this plan. The definition of eligible retirement plan shall
         also apply in the case of a distribution to a surviving spouse, or to a
         spouse or former spouse who is the alternate payee under a qualified
         domestic relation order, as defined in Section 414(p) of the Code.

8.3      Modification of definition of eligible rollover distribution to exclude
         hardship distributions. For purposes of the direct rollover provisions
         of the Plan, any amount that is distributed on account of hardship
         shall not be an eligible rollover distribution and the distributee may
         not elect to have any portion of such a distribution paid directly to
         an eligible retirement plan.

8.4      Modification of definition of eligible rollover distribution to include
         after-tax employee contributions. For purposes of the direct rollover
         provisions in the Plan, a portion of a distribution shall not fail to
         be an eligible rollover distribution merely because the portion
         consists of after-tax employee contributions that are not includible in
         gross income. However, such portion may be transferred only to an
         individual retirement account or annuity described in Section 408(a) or
         (b) of the Code, or to a qualified defined contribution plan described
         in Section 401(a) or 403(a) of the Code that agrees to separately
         account for amounts so transferred, including separately accounting for
         the portion of such distribution which is includible in gross income
         and the portion of such distribution which is not so includible.

                                   SECTION IX
                           ROLLOVERS FROM OTHER PLANS

Rollovers from other plans. The employer, operationally and on a
nondiscriminatory basis, may limit the source of rollover contributions that may
be accepted by this Plan; however, in no event will the Plan permit an after-tax
source of rollover contributions.

                                    SECTION X
                           REPEAL OF MULTIPLE USE TEST

Repeal of Multiple Use Test. The multiple use test described in Treasury
Regulation Section 1.401(m)-2 and the Plan shall not apply for plan years
beginning after December 31, 2001.

                                   SECTION XI
                               ELECTIVE DEFERRALS

Elective Deferrals - Contribution Limitation. No participant shall be permitted
to have elective deferrals made under this plan, or any other qualified plan
maintained by the employer during any taxable year, in excess of the dollar
limitation contained in Section 402(g) of the Code in effect for such taxable
year, except to the extent permitted under Section VI of this amendment and
Section 414(v) of the Code, if applicable.

                                   SECTION XII
                    DISTRIBUTION UPON SEVERANCE OF EMPLOYMENT

12.1     Effective date. This Section shall apply for distributions and
         transactions made after December 31, 2001, regardless of when the
         severance of employment occurred.

                                       3

<PAGE>

12.2     New distributable event. A participant's elective deferrals, qualified
         nonelective contributions, qualified matching contributions, and
         earnings attributable to these contributions shall be distributed on
         account of the participant's severance from employment. However, such a
         distribution shall be subject to the other provisions of the Plan
         regarding distributions, other than provisions that require a
         separation from service before such amounts may be distributed.

This amendment has been executed this ___ day of February, 2002.

Name of Employer:   Resource Bank

         RESOURCE BANK

By:      ________________________________________________

         ________________________________________________
                              Name

         ________________________________________________
                              Title

Name of Plan: Resource Bank Stock and 401(k) Savings Plan

                                       4

<PAGE>

                                AMENDMENT NO. ONE

                   RESOURCE BANK STOCK AND 401(K) SAVINGS PLAN

     THIS AMENDMENT NO. ONE is made this _____ day of _________________, 2002,
by RESOURCE BANK, a Virginia banking corporation (the "Corporation").

     WHEREAS, effective January 1, 2001, the Corporation adopted the amended and
restated Resource Bank Stock and 401(k) Savings Plan (the "Plan") for the
benefit of eligible employees; and

     WHEREAS, under Section 9.2 of the Plan, the Corporation reserved the right
to amend the Plan and now desires to do so, effective January 1, 2001, to
clarify certain provisions of the Plan to comply with a request from the
Internal Revenue Service in connection with an application for a favorable
determination letter on the Plan.

     NOW, THEREFORE, the Corporation hereby amends the Plan, effective January
1, 2001, as follows:

     1.   Paragraph 1.15 of Article I is deleted in its entirety, and the
following is substituted in lieu thereof:

          1.15 "Employee" means any person who is employed by the Employer,
          excluding (i) any person who is represented by a collective bargaining
          unit for the purpose of bargaining with the Employer with respect to
          retirement benefits, unless the resulting bargaining agreement
          provides for participation in the Plan, (ii) any person employed in a
          position described by the Employer in its payroll and/or personnel
          policies as "temporary" or "seasonal," and (iii) any "leased
          employee," as defined for purposes of Paragraph 2.5, or other
          individual performing services for the Employer who is not a
          common-law employee of the Employer

     2.   Paragraph 2.5 of Article II is deleted in its entirety, and the
following is substituted in lieu thereof:

<PAGE>

          2.5 Leased Employees. For purposes of applying either the percentage
          or the fair cross-section tests of Code (S) 410(b) to the Employees
          eligible to participate in or covered by the Plan, any Leased Employee
          shall be treated as an Employee of the Employer. No such Leased
          Employee shall be eligible to participate or be covered by the Plan,
          however, unless such participation or coverage is required in order to
          satisfy the requirements of Code (S) 410.

          The term "Leased Employee" as used in this Paragraph 2.5 means any
          person who is not an Employee of the Employer and who provides
          services to the Employer if (i) such services are provided pursuant to
          an agreement between the Employer and a leasing organization, and (ii)
          such person has performed such services for the Employer (or for the
          Employer and a related party) on a substantially full-time basis for a
          period of at least 1 year, and (iii) such services are performed under
          primary direction or control by the Employer. The term Leased Employee
          shall have the same meaning given such term pursuant to Code (S)
          414(n).

     3.   Subsection 1.23 of Article I is deleted in its entirety, and the
following is substituted in lieu thereof:

          1.23   "Highly Compensated Employee" means any Employee who:

                 (a)   was at any time during the current or preceding Plan Year
          a five percent (5%) or more owner of an Employer; or

                 (b)   for the preceding Plan Year, received Compensation from
          an Employer in excess of eighty-five thousand dollars ($85,000) (as
          adjusted annually by the Internal Revenue Service for increases in the
          cost of living).

                 (c)   in lieu of subsection (b), if elected by the Employer
          through a plan amendment, received Compensation from an Employer in
          excess of eighty-five thousand dollars ($85,000) (as adjusted annually
          by the IRS for increases in the cost of living) and was in the top
          paid group of Employees (the top twenty percent (20%) of the
          Employer's work force when ranked on the basis of annual Compensation)
          for such year. In determining the top twenty percent (20%) of the
          Employer's work force, there shall be included all Employees,
          regardless of their eligibility to participate in the Plan, except
          Employees who: (1) have not completed six (6) months of service; (2)
          normally work less than seventeen and one-half (17 1/2) hours per
          week; (3) normally work during not more than six (6) months during any
          Plan Year; or (4) have not attained age twenty-one (21).

                                        2

<PAGE>

                 "Highly Compensated Employee," as defined hereinabove, shall
          have the meaning given such phrase by Code (S) 414(q) and applicable
          Treasury Regulations issued thereunder.

      4.  A new Paragraph 7.13 is added to read as follows:

          7.13   Military Service. Effective December 12, 1994, notwithstanding
          any provision of this Plan to the contrary, contributions, benefits,
          and service credit with respect to qualified military service will be
          provided in accordance with Code (S) 414(u).

      5.  In all other respects, the Plan as originally adopted is hereby
ratified and affirmed.

      IN WITNESS WHEREOF, the Corporation, by its duly authorized officer, has
caused this Amendment No. One to be executed as of the day and year first above
written.

                                    RESOURCE BANK

                                    By: ________________________________________

                                    Title: _____________________________________

                                        3

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