Document:

Exhibit 10(a)

                              EMPLOYMENT AGREEMENT

         THIS  AGREEMENT is effective as of the 8th day of June,  1998,  between
JAMES MONROE BANK (the "Bank"),  a commercial  bank organized and existing under
the laws of the Commonwealth of Virginia,  with principal offices at 3033 Wilson
Boulevard,  Arlington,  Virginia  22201,  and JOHN R. MAXWELL  ("MAXWELL"),  and
effective as of June 30, 1999 as to the  obligations  of James  Monroe  Bancorp,
Inc.  ("CORPORATION")  contained in  paragraphs  1(b) and 4(c) herein.  Bank and
Maxwell are also each individually  referred to as a "party" and collectively as
the "parties".

         WITNESSETH  THAT  ,  in  consideration  of  the  mutual  covenants  and
obligations hereinafter set forth, the parties hereto agree as follows:

         1.       EMPLOYMENT.

         (a) Commencing  June 8, 1998, and continuing  through May 31, 2002, and
from year to year thereafter  until terminated under the provisions of paragraph
5 below,  Maxwell  shall be  employed  by the Bank as its  President  and  Chief
Executive Officer.  As President and Chief Executive Officer,  there shall be no
more senior  officer of the Bank and Maxwell  shall report  exclusively  to, and
Maxwell  shall be managed  exclusively  by, its Board of Directors  consistently
with the terms of this Agreement.  The Board of Directors of the Bank shall not,
without  Maxwell's  approval or without  cause,  elect any person to a corporate
position  superior to any of the  positions  held by Maxwell on June 8, 1998, or
remove him from the  offices of  President  and Chief  Executive  Officer of the
Bank, or in any other way fail to maintain Maxwell in the then highest executive
position in the Bank's  organization.  Maxwell's  duties as President  and Chief
Executive  Officer shall be those  normally  undertaken by Presidents  and Chief
Executive  Officers of banks  similar to the Bank in nature and size at the time
he exercises such duties.  Additionally,  in exercising his said duties, Maxwell
shall have such authority and discretion to make decisions binding upon the Bank
as are reasonable and consistent with the good faith discharge of said duties.

         (b) During the term of this Agreement,  Maxwell shall also serve as the
President and Chief Executive Officer of the Corporation. As President and Chief
Executive Officer, there shall be no more senior officer of the Corporation, and
Maxwell shall report  exclusively  to, and Maxwell shall be managed  exclusively
by, its Board of Directors.  The Board of Directors of the Corporation shall not
remove him from the  offices of  President  and Chief  Executive  Officer of the
Corporation,  or in any other way fail to maintain  Maxwell in the then  highest
executive position in the Corporation's organization.

         2. COMMITMENT OF EXECUTIVE. During the term of this Agreement,  Maxwell
shall faithfully and diligently discharge his duties and responsibilities, shall
use his best  efforts  consistent  with the terms of this  Agreement,  and shall
devote all of his business time and attention to the affairs of the Bank, except
for any  period(s) of time during which  Maxwell's  ability to discharge  any of
such duties and responsibilities and devote such time and attention are impaired
as a result of a mental or physical  disability  of his,  or he is on  vacation,
holiday or other leave,  or as otherwise  agreed by the Board of Directors.  The
obligations of this paragraph  shall not be construed to mean that Maxwell shall
not  be a  director  of any  other  corporation,  or be  associated  in any  way
whatsoever with any educational, charitable, civic, social, recreational, youth,
sports or other organization or endeavor.  Provided, however, during the time of
his  employment  under this  Agreement,  Maxwell  shall not be  employed  by any
organization  licensed as a bank by the  Commonwealth  of Virginia or the United
States of America  anywhere  except by the Bank or a subsidiary  or affiliate of
the Bank.

         3.       COMPENSATION.

         (a) During the period  commencing  June 8,1998 and  concluding  May 31,
1999,  the Bank shall pay to Maxwell a base salary of One  Hundred Ten  Thousand
Dollars ($110,000.00).  During the period commencing June 1, 1999 and concluding
May 31,  2000,  the Bank  shall  pay to  Maxwell a base  salary  of One  Hundred
Twenty-Five Thousand Dollars ($125,000.00).  As of June 1, 2000, and again as of
June 1 of each  succeeding  year  during the term of this  Agreement,  Maxwell's
annual base salary for the twelve (12) month period commencing on each such date
shall be an amount of money as  determined  by the Board of  Directors  with due
consideration  of, among other things

                                       1
<PAGE>

believed  relevant  thereto by the Board of  Directors,  (1)  Maxwell's  duties,
responsibilities  and  performance  during the immediate  preceding  twelve (12)
month period and those  expected of him during the then  commencing  twelve (12)
month period,  as President  and Chief  Executive  Officer of the Bank,  and (2)
salaries of persons serving as chief executive officers of other banks having an
asset size or other  characteristics  similar to the Bank as may be  reported in
salary surveys or otherwise  concerning chief executive  officers in the banking
industry  (including,  but not limited to, the  Virginia  Bankers  Association's
Annual Salary Survey Results publication).  Provided,  however, that in no event
shall the Board of  Directors  set  Maxwell's  annual  base  salary for the then
commencing  twelve (12) month period at an amount which is less than One Hundred
and Five percent  (105%) of the annual salary  Maxwell was to receive under this
Agreement during the immediate preceding twelve (12) month period.

         (b)  Salary  as  provided  above  will  be  payable  less   appropriate
deductions as required by law, or otherwise  permitted by Maxwell,  and shall be
paid in  appropriate  installments  to conform with the Bank's  regular  payroll
dates.

         (c) Beginning with and for calendar year 1999 and thereafter,  the Bank
shall pay to Maxwell a bonus with respect to his performance for the Bank during
such calendar year; provided,  however, that at least seventy-five percent (75%)
of such bonus shall be dependent upon objectively  measurable criteria,  and the
balance  dependent  upon  subjectively  measurable  criteria  established in the
discretion  of  the  Board  of  Directors  after   consultation   with  and  due
consideration  of Maxwell's  views thereon.  Furthermore,  the total bonus as to
which  Maxwell  shall be eligible to receive  for any  calendar  year after 1999
shall  be  established  in  the  discretion  of the  Board  of  Directors  after
consultation with and due consideration of Maxwell's views thereon,  and Maxwell
shall be apprised of such  eligible  bonus  amount and the  aforesaid  objective
criteria,  in writing,  during the first calendar  quarter of each of such years
(except for 1999, as to which Maxwell shall be so apprised by January 15, 2000).

         4.       OTHER BENEFITS.

         (a) During the term of this Agreement,  the Bank shall pay the premiums
on a term life insurance  policy(ies) on the life of Maxwell,  which policy(ies)
shall be owned by  Maxwell,  in the face amount of Two  Hundred  Fifty  Thousand
Dollars  ($250,000.00)  through May 31, 1999, but  commencing  June 1, 1999 such
face amount shall be increased to One Million Dollars  ($1,000,000.00),  and for
years  beginning June 1, 2000 and on each  succeeding June 1, the face amount of
such policy shall be increased in the same  proportion as Maxwell's  base salary
is  increased  under  this  Agreement  for the year  commencing  on that June 1.
Further, the said term life insurance policy shall be obtained from an insurance
company  selected  by  Maxwell,  and  the  beneficiary(ies)   thereon  shall  be
determined by Maxwell and there shall be no restraint  against Maxwell retaining
such  policy  after the  expiration  of the term of this  Agreement,  at his own
expense, should he choose to do so.

         (b)  During  the term of this  Agreement,  the Bank  shall  furnish  an
automobile  owned  or  leased  by the  Bank for  Maxwell's  use for any  purpose
whatsoever,  and the Bank shall pay an automobile expense allowance agreed to by
Maxwell and the Board of Directors for fuel,  maintenance and replacement  parts
and consumables,  repairs and all other costs incidental to the use or operation
of the car.  The Bank shall  maintain  reasonable  insurance  coverages  on said
vehicle  at its  expense  for the  benefit  of  Maxwell.  The  make  and type of
automobile shall be consistent with the positions of Maxwell with the Bank based
on the discretion of the Board of Directors.

         (c) The  Corporation  shall  grant  Maxwell the option to acquire up to
Thirty-Six   Thousand,   Eight  Hundred  and  Eighty   (36,880)  shares  of  the
Corporation's  common  stock at the stock's  current  fair  market  value of Ten
Dollars  ($10.00) per share.  This option shall become vested ratably over three
(3) years, with the first one-third (1/3) of the optioned shares becoming vested
on June 1, 1999,  the second  one-third  (1/3) of the optioned  shares  becoming
vested on June 1, 2000,  and the last  one-third  (1/3) of the  optioned  shares
becoming  vested on June 1, 2001. This option shall remain  outstanding  through
May 31, 2008,  notwithstanding any earlier termination of this Agreement for any
reason. This grant shall be exercisable,  in whole or in part, during the period
it is  outstanding,  subject  to the terms of the James  Monroe  Bank 1998 Stock
Option Plan, as adopted by the Corporation.  It is intended that such options be
"non-qualified  stock  options"  within the terms of such Plan and the  Internal
Revenue Code and, on exercise,  the Corporation  shall reimburse Maxwell for any
income taxes  payable by him as an incident of such exercise up to the amount of
the tax benefit to be received by the Corporation as a result of the exercise by
Maxwell of any of said options.  Additionally,  if the  Corporation  seeks or is
required to register any of its securities  under the Securities Act of 1933, as
amended,  or file reports under the Securities Exchange Act of 1934, as

                                       2
<PAGE>

amended,  with the U.S.  Securities and Exchange  Commission,  it shall,  at its
expense, cause to be registered,  without restrictions thereon (except as may be
required by law), all shares of stock acquired by Maxwell,  upon his exercise of
the said non-qualified options with respect thereto.

         (d) Maxwell shall be  reimbursed  for  reasonable  travel and all other
expenses  incurred or paid by Maxwell and which he considers in accordance  with
the  Bank's  policies  and in his  discretion  to be  reasonable  and  proper in
connection  with the  performance  of his services  under this  Agreement,  upon
presentation  of  expense  statements  or  vouchers  or  such  other  supporting
information as may from time to time be requested by the Board of Directors.

         (e) In the event of  Maxwell's  inability  to perform his duties due to
illness or incapacity, the Bank shall continue his full base salary for a period
of three (3) months from the commencement of said disability.  Additionally, for
the  subsequent  three (3) month  period,  the Bank  shall pay to  Maxwell  that
portion  of his base  salary  such that the total  amount  received  by  Maxwell
pursuant to this sentence plus the amount,  if any, received by Maxwell pursuant
to the Bank's income  disability  policy (if such policy exists) equals his full
base salary for said  subsequent  three (3) month  period.  Thereafter,  Maxwell
shall  only be  entitled  to receive  payments  pursuant  to the  Bank's  income
disability policy, if such policy exists.

         (f) Maxwell shall be entitled to participate in and enjoy  according to
Bank policy any and all pension,  retirement,  profit-sharing,  stock  purchase,
stock option, life insurance, accident insurance, medical reimbursement,  health
insurance or hospitalization  plan, cafeteria plan, deferred  compensation plan,
vacations,  holidays and other leave and any other fringe  benefits in which any
other employee or executive of the Bank is eligible to participate  and entitled
by Bank policy to enjoy.

         (g) The Bank may pay the new  member  induction  fees,  and  thereafter
during the term of this Agreement, the Bank may pay all dues and monthly charges
incurred by Maxwell  for a full golf  membership  for Maxwell at a country  club
agreed  upon by Maxwell  and the Board of  Directors  at such time as said Board
determines is reasonable given the Bank's level of financial performance.

         (h) The Bank shall  reimburse  Maxwell for the actual,  reasonable  and
necessary  expenses  incurred in  permanently  relocating  his  residence at the
Bank's  request,  if Maxwell's new office  location is at least 35 miles farther
from his current  residence than his current office location is from his current
residence.  Relocation  expenses  shall include the following  items:  temporary
living  expenses at the new location (up to 60 days),  moving of household goods
and settlement  costs of the sale of or cancellation of the lease on his current
residence, settlement costs for the purchase or lease of his new residence (less
interest and loan origination  fees). In the event that the interest rate on the
financing for Maxwell's new residence exceeds the interest rate on the financing
for his current residence,  the Bank shall pay Maxwell the difference each month
for three years.

         5.       TERM AND TERMINATION.

         (a) This  Agreement  shall be effective  as of June 8, 1998,  and shall
remain in effect through May 31, 2002, and from year to year thereafter,  unless
terminated as provided herein.

         (b) Either party may  terminate the Agreement as of May 31, 2002, or as
of the end of any  subsequent  one (1) year period,  by giving written notice of
termination  to the  other  party not less than  ninety  (90) days  prior to the
intended date of termination.

         (c) This Agreement shall terminate upon the death of Maxwell.

         (d) This  Agreement  shall  terminate  in the  event  of the  permanent
disability of Maxwell,  which shall mean a disability  due to physical or mental
illness or incapacity resulting in Maxwell's inability to perform each and every
one of his duties as  President  and Chief  Executive  Officer of the Bank for a
period of six (6)  consecutive  months,  or for an aggregate  period of nine (9)
months,  or more,  in any  twelve  (12)  month  period  during  the term of this
Agreement,  as  determined  by a physician  selected by Maxwell and the Board of
Directors  of the Bank (who  shall  cooperate  in good  faith with each other to
choose),  it being  understood and agreed that if Maxwell can perform any of his
said duties, then he shall not be considered  permanently  disabled for purposes
of this paragraph 5(d).

                                       3
<PAGE>

         (e) This Agreement shall terminate in the event of Maxwell's "Dismissal
for Just  Cause"  as next  defined,  unless  cured by  Maxwell  as  provided  in
subparagraph 5(e)(2) below.

         (1) "Dismissal for Just Cause" shall  exclusively mean a termination of
Maxwell's   employment  because  of  Maxwell's  personal   dishonesty,   willful
misconduct,  breach of fiduciary duty  involving  personal  profit,  intentional
failure to perform his duties as President and Chief Executive Officer,  willful
violation of any law,  rule or  regulation  of any  governmental  agency  having
jurisdiction  over Maxwell,  other than traffic  violations or similar offenses,
but including Maxwell's willfully causing the Bank to violate any final cease or
desist order issued  against the Bank by a bank regulator  having  authority and
jurisdiction to issue such final order. In no event shall failure to perform his
said  duties as a result  of, or in  connection  with,  any  physical  or mental
disability constitute just cause.

         (2) Prior to Maxwell's Dismissal for Just Cause, the Bank shall provide
written  notice of its  reasons  as to why it  believes  such  cause  exists and
Maxwell shall have thirty (30) days from receipt of such notice to effect a cure
of same.

         (f) This  Agreement  shall  terminate  at the option of Maxwell upon or
within  six (6)  months  after a Change of  Control  of the Bank as  defined  in
subparagraph  5(f)(1), upon Maxwell's good faith determination that the Bank has
engaged  in any of the  activities  set  forth  below in  paragraphs  5(g)(2)(i)
through (iv) below.

         (1) For the  purposes of this  Agreement,  the term "Change in Control"
means anyone of the following events occurring during the term of this Agreement
and  subsequent to September 1, 1999:  (i) the  acquisition  by any person or by
persons  acting  as a  "Group"  (within  the  meaning  of  Section  13(d) of the
Securities  Exchange Act of 1934) of ownership of, holding or power to vote more
than 51% of the voting stock of the Bank;  (ii) the acquisition by any person or
by persons  acting as a Group of the power to control the election of a majority
of the  members  of the  Bank's  Board of  Directors;  (iii) the  exercise  of a
controlling  influence over the management or policies of the Bank by any person
or by persons acting as a Group; or (iv) the failure of Continuing Directors (as
next defined) to constitute at least two-thirds of the Board of Directors of the
Bank during any period of twenty-four (24) consecutive  months.  For purposes of
this Agreement,  "Continuing  Directors"  shall mean only those  individuals who
were  members  of the Board of  Directors  on June 30,  1999,  and  those  other
individuals  whose election or nomination for election as a member of said Board
was approved by a vote of at least  two-thirds of the Continuing  Directors then
in office on said Board.  For purposes of this  subparagraph  5(f)(1) only,  the
term  "person"  refers to a human being or a  corporation,  partnership,  trust,
association, joint venture, pool, syndicate, sole proprietorship, unincorporated
organization, or any other form of entity not specifically listed herein.

         (2) Upon and  after a Change of  Control,  the Bank  shall not  without
Maxwell's prior written agreement thereto:

                  (i) Make any material change in Maxwell's  status or positions
with the Bank or a  material  change in  Maxwell's  duties  or  responsibilities
inconsistent  with his status or  positions,  or remove  Maxwell from or fail to
reappoint or reelect  Maxwell to such  positions,  except in  connection  with a
termination  of  Maxwell's  employment  by the  Bank  under  the  provisions  of
paragraph 5(b), 5(c), 5(d) or 5(e);

                  (ii)  Fail to  continue  in effect  each Plan (as  hereinafter
defined)  in which  Maxwell is  participating  immediately  before the Change in
Control of the Bank, or place into effect Plans providing at least substantially
similar  benefits,  other than as a result of the normal  expiration of any such
Plan in  accordance  with its terms as in  effect  at the time of the  Change in
Control,  or take any action or fail to take action which would adversely affect
Maxwell's  continued  participation in each such Plan on at least as favorable a
basis to Maxwell as is the case  before the date of the Change in  Control.  For
purposes of this subparagraph,  "Plan" shall mean any compensation plan, such as
an  incentive or stock option plan,  or any  employee  benefit  plan,  such as a
thrift,  pension, profit sharing,  medical disability,  accident, life insurance
plan or policy,  or any other  plan,  program or policy of the Bank  intended to
benefit employees.

                  (iii)  Refuse to  continue  to allow  Maxwell to attend to any
matter or engage in any  activity  not  directly  related to the business of the
Bank, which, immediately prior to the date the Change in Control occurs, Maxwell
was  permitted  by the Board of  Directors  to attend or in which,  prior to the
Change in Control, Maxwell was permitted by the Board of Directors to engage.

                                       4
<PAGE>

                  (iv) Assign this Agreement or delegate any  obligations of the
Bank under this Agreement.

         6.       SEVERANCE UPON TERMINATION AND RESTRICTIVE COVENANT.

         (a)(1) If Maxwell's employment under this Agreement,  or this Agreement
itself is  terminated as a result of the Bank's or the  Corporation's  breach of
this  Agreement,  or if Maxwell  chooses to terminate his employment  under this
Agreement  as a result of the Bank's or the  Corporation's  breach of any one or
more of the Bank's or the Corporation's obligations under this Agreement,  then,
as liquidated  damages,  and in lieu of any other further payments which Maxwell
would be  otherwise  entitled to receive  under  paragraphs  3 and 4 (other than
4(c)) of this  Agreement),  the Bank shall (1) pay Maxwell for a period equal to
twelve (12) months, at the full amount of base salary,  bonus and other benefits
to which he was entitled  immediately  before such  termination,  as provided in
this  Agreement  (said sum to be paid,  at the option of Maxwell,  in either one
lump sum within  thirty  (30) days of such  termination,  or in  periodic  equal
monthly payments over the following  twelve (12) month period),  and (2) provide
Maxwell  executive  outplacement  assistance  from an  organization of Maxwell's
choice and the cost therefor, up to an amount equal to eighteen percent (18%) of
the base salary to which he was entitled under this Agreement immediately before
such termination, shall be borne by the Bank. In the event the monies payable to
or for Maxwell  pursuant to the foregoing  provisions of this paragraph  6(a)(1)
result in a Federal  excise  tax  obligation  on  Maxwell  with  respect to such
payments, then, at Maxwell's discretion, the total amount of such payments shall
be reduced to the  maximum  amount  that may be paid to or for  Maxwell  without
causing him to incur any such Federal excise tax obligation thereon.

         (a)(2) If Maxwell's  employment  under this Agreement or this Agreement
itself is  terminated as a result of the Bank's or the  Corporation's  breach of
this Agreement,  or Maxwell  terminates this Agreement as a result of the Bank's
or the  Corporation's  breach  of this  Agreement,  Maxwell  shall  be  under no
restriction whatsoever as to the nature of the business or employment activities
in which he may engage after termination of his employment.

         (b)(1) In the event  Maxwell's  employment  is  terminated by the Bank,
pursuant to the  provisions  of paragraph  5(b) above,  for a period of eighteen
(18) months after said  employment  termination,  Maxwell shall not Compete with
the Bank,  unless the Bank otherwise  agrees in writing to waive  application of
this  noncompetition  provision  or to reduce  the period of its  duration.  For
purposes of this Agreement, the term "Compete" shall mean Maxwell being employed
by, or consulting with, or providing services for, any organization  licensed as
a bank by the  Commonwealth  of Virginia or the United States of America,  if in
connection  with such  employment,  consultation  or provision of services,  the
majority of Maxwell' s working  hours are  consumed at an office of such bank in
the Counties of Arlington,  Virginia or Fairfax,  Virginia, or such other county
in  which  the  Bank may have a branch  or loan  production  office  where  Bank
employees are regularly  present at such branch or loan production  office as of
the date Maxwell's employment under this Agreement is terminated.

         (b)(2)  For  the   duration,   up  to  eighteen   (18)  months  of  the
applicability  of this  noncompetition  provision  to  Maxwell,  the Bank  shall
continue to pay Maxwell the full amount of base salary, bonus and other benefits
to which he was entitled  immediately  before such  termination,  as provided in
this Agreement, in equal monthly payments.

         (c)(1) In the event  Maxwell's  employment  is  terminated  by  Maxwell
pursuant to the provisions of paragraph 5(f) above,  for a period of twelve (12)
months after such  employment  termination,  Maxwell  shall not Compete with the
Bank.

         (c)(2) In the event Maxwell shall  terminate his employment  under this
Agreement pursuant to the provisions of paragraph 5(f) above, the Bank shall pay
Maxwell  for a period  equal to twelve  (12)  months at the full  amount of base
salary,  bonus and other  benefits which he was receiving  immediately  prior to
such  termination.  Such sum shall be paid, at the option of Maxwell,  in either
one lump sum within thirty (30) days of said  termination,  or in periodic equal
monthly payments over the following twelve (12) months period, and such payments
shall be in lieu of any other future  payments  which Maxwell would be otherwise
entitled  to  receive  under  paragraphs  3 and 4  (other  than  4(c))  of  this
Agreement).

                                       5
<PAGE>

         (d) In the event Maxwell's employment is terminated by Maxwell pursuant
to the  provisions  of  paragraph  5(b)  above,  or by the Bank  pursuant to the
provisions of paragraph 5(e) above,  Maxwell shall not Compete with the Bank for
a period of two (2) years after said employment  termination.  In such event, no
severance shall be payable to Maxwell after the termination of his employment.

         (e) The options  granted to Maxwell  under the  provisions of paragraph
4(c)  above  and all  other  obligations  of the  Bank to  Maxwell  accrued  but
unsatisfied  prior to a termination of this Agreement shall remain in full force
and effect until satisfied.

         7.  CONFIDENTIALITY.  Maxwell agrees that, except as may be in his good
faith  judgment  required to be disclosed  to a third party in the  discharge of
Maxwell's duties under this Agreement,  he will regard as confidential,  and not
intentionally and knowingly  disclose to a third party without written authority
from  the  Bank,  information  pertaining  to  the  business  of the  Bank,  its
customers, subsidiaries and affiliates that is obtained by him during the course
of his employment with the Bank, which is indeed confidential and proprietary to
the Bank. For purposes of this Section 7, any information which (i) was known by
Maxwell,  or became known by him, by way of his own discovery  independently  of
his employment with the Bank or by way of a communication  Maxwell received from
a third party which has no obligation of  confidentiality  to the bank regarding
such  information;  (ii) was  disclosed by the Bank to a third party free of any
obligation of  confidentiality  to the Bank,  (iii) was,  without  violating any
obligation of confidentiality it had to the Bank,  communicated by a third party
to any other  person  or  entity;  or (iv) is or comes  into the  public  domain
through no fault of Maxwell, shall not be considered confidential or proprietary
to the Bank.  This Section 7 shall not be construed as restricting  Maxwell from
disclosing  information  which is  confidential  and  proprietary to the Bank to
employees  of the Bank or  others  engaged  by the Bank who  reasonably  require
access to such information in order to discharge their duties to the Bank.

         8.  ELECTION  TO BOARD OF  DIRECTORS.  Maxwell  shall  stand for and be
endorsed and  recommended by the Bank for election to its Board of Directors for
annual  terms  coinciding  as closely as possible  with those  specified in this
Agreement.

         9. GOOD FAITH AND REASONABLENESS. Any matters which, in connection with
or pursuant to this  Agreement,  are to be determined by the Board of Directors,
shall be determined in good faith and  reasonably in light of the  circumstances
of those matters.  In the event Maxwell  disagrees with the determination by the
Board of Directors on any such matter,  he shall bring that  disagreement to the
attention of the Board of Directors and,  whereupon,  the parties shall attempt,
in good faith,  to resolve their said  differences  through a mediator of mutual
selection, or in the event such selection is not made within thirty (30) days of
the said notice from  Maxwell,  or if the results of the said good faith  effort
with a mediator  are not  satisfactory  to either  party,  the dispute  shall be
subject to arbitration under paragraph 14 hereof.

         10. ASSIGNMENT; BINDING EFFECT. This Agreement is personal in nature as
to each of the parties hereto. Except by amending this Agreement,  neither party
may assign or transfer  this  Agreement,  assign or transfer  rights  under this
Agreement, or delegate obligations under this Agreement. This Agreement shall be
binding upon the  successors and assigns of the Bank.  This  Agreement  shall be
binding  upon  and  shall  inure  to  the  benefit  of  the  heirs,   executors,
administrators, guardians, and other personal representatives of Maxwell.

         11. ENTIRE AGREEMENT.  This instrument contains the entire agreement of
the parties relating to the subject matter hereof and supersedes and cancels all
prior  written  and oral  agreements  and  understandings  between  the  parties
relating  to the  subject  matter  of this  Agreement,  which  are not set forth
herein.  No amendment or  modification  of this Agreement  shall be valid unless
made in writing and signed by the parties  hereto.  No term or condition of this
Agreement  shall be deemed to have been waived  except by written  instrument of
the party charged with such waiver.

         12. SEVERABILITY. In the event anyone or more of the provisions of this
Agreement shall for any reason be held invalid,  illegal or unenforceable in any
particular  circumstance  by  any  tribunal  of  competent  jurisdiction,   such
provision  shall  be  valid  in  other  circumstances  and  for  the  particular
circumstance  the  remaining  provisions  of this  Agreement  shall  be read and
construed as though the said  invalid,  illegal or  unenforceable  provision had
never been a part hereof.

                                       6
<PAGE>

         13.  GOVERNING LAW. This Agreement will be construed in accordance with
the laws of the Commonwealth of Virginia, excluding the choice of law provisions
thereof.

         14. NOTICES.  All notices to be sent to either party by the other party
hereto  pursuant to this Agreement shall be sent by registered or certified mail
to the following respective addresses:

                  (a)      Bank.  If to the Bank, addressed to it at:
3033 Wilson Boulevard
                           Arlington, Virginia  22201

                           With a required copy to:

                           Chairman of the Board
                           David W. Pijor, Esquire
                           10482 Armstrong Street
                           Fairfax, Virginia  22030

                  (b)      Maxwell.  If to Maxwell, addressed to him at:

                           4708 Brentwall Court
                           Chantilly, Virginia  20152

                           With a required copy to:

                           Steve A. Mandell, Esquire
                           The Mandell Law Firm
                           A Professional Corporation
                           8133 Leesburg Pike, Suite 630
                           Vienna, Virginia  22182-2706

         15.  ARBITRATION.  Any  dispute  or  controversy  arising  under  or in
connection  with  this  Agreement  shall  be  settled   exclusively  by  binding
arbitration in Arlington  County,  Virginia,  in accordance  with the commercial
arbitration  rules  of the  American  Arbitration  Association  then in  effect.
Judgment  may  be  entered  on  the  arbitrator's  award  in  any  court  having
jurisdiction.

         IN WITNESS WHEREOF,  the parties have executed this Agreement effective
as of the date first above written.

------------------------------------        ------------------------------------
Witness                                     John R. Maxwell

                                            JAMES MONROE BANK
                                            a Virginia Corporation

                                            By:
------------------------------------           ---------------------------------
Attest                                      David W. Pijor, Chairman

                                            JAMES MONROE BANCORP, INC.
                                            a Virginia Corporation

                                            By:
------------------------------------           ---------------------------------
Attest                                            David W. Pijor, Chairman

                                       7Exhibit 10(b)

                                JAMES MONROE BANK
                             1998 STOCK OPTION PLAN

         1.       PURPOSE OF PLAN.

         The  purposes of this James  Monroe Bank 1998 Stock Option Plan are (a)
to attract and retain outstanding key management  employees;  (b) to further the
growth,  development  and financial  success of James Monroe Bank by recognizing
and rewarding those key employees  responsible  therefor;  and (c) to provide an
incentive  to, and  encourage,  stock  ownership in the Bank by those  employees
responsible for the policies and operations of the Bank.

         2.       DEFINITIONS.

                  As used herein, the following definitions shall apply:

         (a)      "Affiliate" shall mean any "parent corporation" or "subsidiary
corporation"  of the Bank, as such terms are defined in Section  424(e) and (f),
respectively, of the Code.

         (b)      "Agreement"  shall  mean a mitten  agreement  entered  into in
accordance with Paragraph 5(c).

         (c)      "Awards"  shall mean a grant of  Options,  unless the  context
clearly indicates a different meaning.

         (d)      "Bank" shall mean James Monroe Bank.

         (e)      "Board" shall mean the Board of Directors of the Bank.

         (f)      "Change in Control" shall mean anyone of the following events
occurring after the Effective  Date:(1) the acquisition of ownership of, holding
or power to vote more than 51% of the Bank's voting stock;  (2) the  acquisition
of the power to control the election of a majority of the Bank's directors;  (3)
the exercise of a controlling  influence  over the management or policies of the
Bank by any  person or by persons  acting as a "group"  (within  the  meaning of
Section  13(d) of the  Securities  Exchange Act of 1934);  or (4) the failure of
Continuing  Directors to constitute at least  two-thirds of the Board during any
period of two (2)  consecutive  years.  For  purposes of this Plan,  "Continuing
Directors" shall include only those individuals who were members of the Board at
the Effective Date and those other  individuals whose election or nomination for
election as a member of the Board was approved by a vote of at least  two-thirds
of the Continuing  Directors then in office.  For purposes of this  subparagraph
only, the term "person"  refers to an individual or a corporation,  partnership,
trust,  association,   joint  venture,  pool,  syndicate,  sole  proprietorship,
unincorporated  organization or any other form of entity not specifically listed
herein.  The  decision  of the  Committee  as to whether a change in control has
occurred shall be conclusive and binding.

         (g)      "Code"  shall  mean the  Internal  Revenue  Code of  1986,  as
amended.

         (h)      "Committee"  shall  mean the  Compensation  and  Stock  Option
Committee appointed by the Board in accordance with Paragraph 5(a) hereof or, in
the absence thereof, the entire Board.

         (i)      "Common  Stock" shall mean the common  stock,  par value $5.00
per share, of the Bank.

         (j)      "Continuous   Service"   shall   mean  the   absence   of  any
interruption  or  termination of service to the Bank as an employee or Director.
Continuous  Service  shall  not be  considered  interrupted  in the case of sick
leave,  military leave or any other leave of absence  approved by the Bank or in
the case of transfers between payroll locations of the Bank or between the Bank,
an Affiliate or a successor.

         (k)      "Effective Date" shall mean the date specified in Paragraph 13
hereof.

         (l)      "Employee" shall mean any person employed by the Bank or by an
Affiliate, within the meaning of Section 3401(c) of the Code.

                                       1
<PAGE>

         (m)      "Exercise  Price" shall mean the price per  Optioned  Share at
which an Option may be exercised.

         (n)      "ISO" means an option to purchase Common Stock which meets the
requirements  set  forth  in  the  Plan,  and  which  is  intended  to be and is
identified as an "incentive  stock option"  within the meaning of Section 422 of
the Code.

         (o)      "Market Value" shall mean the fair market value of the Common
Stock, as determined under Paragraph 7(b) hereof.

         (p)      "Non-ISO" means an option to purchase Common Stock which meets
the  requirements  set forth in the Plan but which is not  intended to be and is
not identified as an ISO.

         (q)      "Option" means an ISO and/or a Non-ISO.

         (r)      "Optioned  Shares"  shall  mean  Shares  subject  to an Option
granted pursuant to this Plan.

         (s)      "Participant"  shall  mean any person  who  receives  an Award
pursuant to the Plan.

         (t)      "Plan"  shall mean this James  Monroe  Bank 1998 Stock  Option
Plan.

         (u)      "Rule  16b-3"  shall mean Rule 16b-3 of the General  Rules and
Regulations under the Securities Exchange Act of 1934, as amended.

         (v)      "Share" shall mean one share of Common stock.

         3.       TERM OF THE PLAN AND AWARDS.

                  (a) TERM OF THE PLAN.  The Plan shall continue in effect for a
term of five (5)  years  from  the  Effective  Date,  unless  sooner  terminated
pursuant to Paragraph 16 hereof.  No Award shall be granted under the Plan after
five (5) years from the Effective Date.

                  (b) TERM OF AWARDS.  The term of each Award  granted under the
Plan shall be established by the Committee, but shall not exceed ten (10) years,
provided,  however,  that in the case of an ISO granted to an Employee  who owns
Shares representing more than 10% of the outstanding Common Stock at the time an
ISO is granted, the term of such ISO shall not exceed five (5) years.

         4.       SHARES SUBJECT TO THE PLAN.

         Except as otherwise  required by the provisions of Paragraph 12 hereof,
the aggregate number of Shares  deliverable  pursuant to Awards shall not exceed
66,880 Shares.  Optioned  Shares may either be authorized but unissued Shares or
Shares held in treasury.  If Awards should expire,  become  unexercisable  or be
forfeited for any reason without having been exercised or become vested in full,
the  Optioned  Shares  shall,  unless the Plan shall  have been  terminated,  be
available for the grant of Additional Awards under the Plan.

         5.       ADMINISTRATION OF THE PLAN.

                  (a)   COMPOSITION  OF  THE   COMMITTEE.   The  Plan  shall  be
administered  by the  Committee,  which shall  consist of not less than four (4)
members of the Board.  Members of the  Committee  shall serve at the pleasure of
the Board.  In the absence at any time of a duly appointed  Committee,  the Plan
shall be administered by the entire Board.

                  (b) POWERS OF THE COMMITTEE.  Except as limited by the express
provisions  of the Plan or by  resolutions  adopted by the Board,  the Committee
shall have sole and complete authority and discretion (i) to select Participants
and grant Awards,  (ii) to determine the form and content of Awards to be issued
in the form of Agreements  under the Plan,  (iii) to interpret the Plan, (iv) to
prescribe,  amend and rescind rules and regulations

                                       2
<PAGE>

relating to the Plan and (v) to make other determinations necessary or advisable
for the  administration  of the Plan. The Committee  shall have and may exercise
such other power and  authority as may be delegated to it by the Board from time
to time. A majority of the entire  Committee  shall  constitute a quorum and the
action of a majority of the members  present at any meeting at which a quorum is
present,  or acts approved in writing by a majority of the  Committee  without a
meeting, shall be deemed the action of the Committee.

                  (c)  AGREEMENT.  Each Award  shall be  evidenced  by a written
agreement  containing such provisions as may be approved by the Committee.  Each
such  Agreement  shall  constitute a binding  contract  between the Bank and the
Participant, and every Participant,  upon acceptance of such Agreement, shall be
bound by the terms and restrictions of the Plan and of such agreement. The terms
of each such Agreement  shall be in accordance with the Plan, but each agreement
may include  such  additional  provisions  and  restrictions  determined  by the
Committee,  in its  discretion,  provided that such  additional  provisions  and
restrictions are not inconsistent with the terms of the Plan. In particular, the
Committee shall set forth in each Agreement (i) the Exercise Price of an Option,
(ii) the number of Shares  subject  to, and the  expiration  date of, the Award,
(iii) the manner, time and rate (cumulative or otherwise) of exercise or vesting
of such  Award,(iv) the  restrictions,  if any, to be placed upon such Award, or
upon Shares which may be issued upon  exercise of such Award and (v) whether the
Option is an ISO or a Non-ISO.

                  The Chairman of the Committee and such other officers as shall
be designated by the  committee are hereby  authorized to execute  Agreements on
behalf  of the Bank and to  cause  them to be  delivered  to the  recipients  of
Awards.

                  (d) EFFECTIVE OF THE  COMMITTEE'S  DECISIONS.  All  decisions,
determinations  and   interpretations  of  the  Committee  shall  be  final  and
conclusive on all persons affected thereby.

                  (e)  INDEMNIFICATION.  In  addition  to such  other  rights of
indemnification  as they  may  have,  the  members  of the  Committee  shall  be
indemnified by the Bank in connection with any claim, action, suit or proceeding
relating to any action taken or failure to act under or in  connection  with the
Plan or any Award,  granted  hereunder to the full extent provided for under the
Bank's Articles of Incorporation  or Bylaws with respect to the  indemnification
of Directors.

         6.       GRANT OF OPTIONS.

                  (a) GENERAL  RULE. In its sole  discretion,  the Committee may
grant Options or Non-ISO to Employees of the Bank or its Affiliates.

                  (b) SPECIAL RULES FOR ISOs. The aggregate  Market Value, as of
the date the Option is  granted,  of the Shares  with  respect to which ISOs are
exercisable  for the first time by an employee  during any calendar  year (under
all incentive  stock option plans, as defined in Section 422 of the Code, of the
Bank or any present or future Parent or Subsidiary of the Bank) shall not exceed
$100,000.  Notwithstanding the prior provisions of this paragraph or designation
of an  Option  as an ISO,  the  Committee  may  grant  Options  in excess of the
foregoing  limitations  in which  case such  Options  granted  in excess of such
limitation shall be Options which are Non-ISOs.

         7.       EXERCISE PRICE FOR OPTIONS.

                  (a) LIMITS ON COMMITTEE  DISCRETION.  The Exercise Price as to
any  particular  Option granted under the Plan shall not be less than the Market
Value of the  Optioned  Shares on the date of grant.  In the case of an Employee
who owns Shares  representing more than 10% of the Bank's  outstanding Shares of
Common Stock at the time an ISO is granted, the Exercise Price shall not be less
than  110% of the  Market  Value of the  Optioned  Shares at the time the ISO is
granted.

                  (b) STANDARDS FOR  DETERMINING  EXERCISE  PRICE. If the Common
Stock is listed on a national securities exchange (including the NASDAQ National
Market) on the date in  question,  then the Market  Value per Share shall be not
less than the average of the highest and lowest  selling  price on such exchange
on such date,  or if there were no sales on such date,  then the Exercise  Price
shall be not less than the mean between the bid

                                       3
<PAGE>

and asked price on such date. If the Common Stock is traded  otherwise than on a
national securities exchange on the date in question,  then the Market Value per
Share  shall be not less than the mean  between  the bid and asked price on such
date,  or, if there is no bid and  asked  price on such  date,  then on the next
prior business day on which there was a bid and asked price.  If no such bid and
asked  price is  available,  then the Market  Value per Share  shall be its fair
market  value  as  determined  by  the  Committee,  in  its  sole  and  absolute
discretion.

                  (c) REISSUANCE OF OPTIONS.  Notwithstanding anything herein to
the  contrary,  the  Committee  shall have the  authority to cancel  outstanding
Options  with the  consent of the  Participant  and to reissue  new Options at a
lower Exercise Price equal to the then Market Value per share of Common Stock in
the event that the Market  Value per share of Common  Stock at any time prior to
the date of exercise outstanding Options falls below the Exercise Price.

         8.       EXERCISE OF OPTIONS.

                  a.   GENERALLY.   Any  Option  granted   hereunder   shall  be
exercisable  at such times and under  such  conditions  as shall be  permissible
under the terms of the Plan and of the Agreement  granted to a  Participant.  An
Option may not be exercised for a fractional Share.

                  b. PROCEDURE FOR EXERCISE. A Participant may exercise Options,
subject  to  provisions  relative  to its  termination  and  limitations  on its
exercise,  only by (1)  written  notice of intent to  exercise  the Option  with
respect  to  a  specified  number  of  Shares  and  (2)  payment  to  the  Bank)
contemporaneously  with delivery of such notice) in cash, in Common Stock,  or a
combination  of cash and Common Stock,  of the amount of the Exercise  Price for
the number of Shares with  respect to which the Option is then being  exercised.
Each such notice (and payment where required)  shall be delivered,  or mailed by
prepaid registered or certified mail,  addressed to the Secretary of the Bank at
the Bank's executive  offices.  Common Stock utilized in full or partial payment
of the Exercise Price for Options shall be value at its Market Value at the date
of exercise.

                  (c) PERIOD OF  EXERCISABILITY.  Except to the extent otherwise
provided in the terms of an Agreement,  an ISO or Non-ISO may be exercised by an
Employee Participant only while he is an Employee or Director and has maintained
Continuous Service from the date of the grant of the ISO, or within three months
after  termination  of such  Continuous  Service (but not later than the date on
which the Option would otherwise  expire),  except if the Employee's  Continuous
Service terminates by reason of:

         (1) "Just Cause"  which for purposes  hereof shall have the meaning set
forth in any unexpired employment or severance agreement between the Participant
and the Bank and/or the Bank (and, in the absence of any such  agreement,  shall
mean  termination  because  of  the  Employee's  personal  dishonesty,   willful
misconduct,  breach of fiduciary duty  involving  personal  profit,  intentional
failure  to  perform  stated  duties,  willful  violation  of any  law,  rule or
regulation  (other  than  traffic  violations  or  similar  offenses)  or  final
cease-and-desist  order),  then the  Participant's  rights to exercise  such ISO
shall expire on the date of such termination;

         (2) Death,  then to the  extent  that the  Participant  would have been
entitled to exercise  the ISO  immediately  prior to his death,  such ISO of the
deceased  Participant may be exercised within two (2) years from the date of his
death (but not later than the date on which the Option would  otherwise  expire)
by the personal  representatives  of his estate or person or persons to whom his
rights  under  such ISO  shall  have  passed by will or by laws of  descent  and
distribution;

         (3) Permanent and Total  Disability (as such term is defined in Section
22(e)(3) of the Code),  then to the extent that the Participant  would have been
entitled  to  exercise  the ISO  immediately  prior to his  Permanent  and Total
Disability,  such ISO may be  exercised  within  one year  from the date of such
Permanent  and Total  Disability,  but not later  than the date on which the ISO
would otherwise expire.

Notwithstanding  the provisions of any Option which provides for its exercise in
installments   as  designated  by  the  Committee,   such  Option  shall  become
immediately  exercisable  upon the  Participant's  death or Permanent  and Total
Disability.

                                       4
<PAGE>

                  (d)  EFFECT  OF THE  COMMITTEE'S  DECISIONS.  The  Committee's
determination  whether a Participant's  Continuous  Service has ceased,  and the
effective date thereof,  shall be final and  conclusive on all persons  affected
thereby.

         9.       CHANGE IN CONTROL.

                  (a) GENERAL RULE.  Notwithstanding the provisions of any Award
which provide for its exercise or vesting in installments,  all Options shall be
immediately  exercisable and fully vested upon a Change in Control. With respect
to Options,  at the time of a Change in Control,  the Participant  shall, at the
discretion of the  Committee,  be entitled to receive cash in an amount equal to
the excess of the Market Value of the Common  Stock  subject to such Option over
the Exercise  Price of such Shares,  in exchange  for the  cancellation  of such
Options by the Participant.

                  (b)  EXCEPTION TO GENERAL RULE.  Notwithstanding  subparagraph
(a) of this  Paragraph,  in no event may an Option be canceled  in exchange  for
cash within the six-month period following the date of its grant.

         10.      EFFECT OF CHANGES IN COMMON STOCK SUBJECT TO THE PLAN.

                  (a)  RECAPITALIZATION,  STOCK SPLITS, ETC. The number and kind
of shares  reserved  for  issuance  under the Plan,  and the  number and kind of
shares  subject to outstanding  Awards and the Exercise Price thereof,  shall be
proportionately  adjusted  for any  increase,  decrease,  change or  exchange of
Shares for a different  number or kind of shares or other securities of the Bank
which results from a merger,  consolidation,  recapitalization,  reorganization,
reclassification, stock dividend, stock split, combination of shares, or similar
event in which the number or kinds of shares is changed  without  the receipt or
payment of consideration by the Bank.

                  (b)  TRANSACTIONS  IN  WHICH  THE  BANK IS NOT  THE  SURVIVING
ENTITY.  Subject to Paragraph 9 hereof,  in the event of (i) the  liquidation or
dissolution of the Bank, (ii) a merger or consolidation in which the Bank is not
the surviving  entity , or (iii) the sale or disposition of all or substantially
all of the Bank's  assets  (any of the  foregoing  to be referred to herein as a
"Transaction"),  all Awards outstanding at the effectiveness of such Transaction
shall be surrendered.  With respect to each Award so surrendered,  the Committee
shall, in its sole and absolute discretion,  determine whether the holder of the
surrendered Award shall receive:

         (1) for each Share then subject to an outstanding  Award the number and
kind of shares  into which each  outstanding  Share  (other  than Shares held by
dissenting  stockholders) is changed or exchanged,  together with an appropriate
adjustment to the Exercise Price in the case of Options; or

         (2) a cash payment (from the Bank or the successor corporation),  in an
amount equal to the Market Value of the Shares  subject to the Award on the date
of the Transaction, less the Exercise Price of the Award.

                  (c) SPECIAL RULE FOR ISOs.  Any  adjustment  made  pursuant to
subparagraph  (a) or  (b)(1)  hereof  shall  be  made  in  such a  manner  as to
constitute a modification,  within the meaning of Section 424(h) of the Code, of
outstanding ISOs.

                  (d)  CONDITIONS  AND   RESTRICTIONS  OF  NEW,   ADDITIONAL  OR
DIFFERENT SHARES OR SECURITIES. If, by reason of any adjustment made pursuant to
this Paragraph,  a Participant  becomes entitled to new, additional or different
shares of stock or securities, such new, additional or different shares of stock
or  securities  shall  thereupon  be  subject  to  all  of  the  conditions  and
restrictions  which were  applicable to the Shares  pursuant to the Award before
the adjustment was made.

                  (e) OTHER  ISSUANCES.  Except as  expressly  provided  in this
Paragraph,  the  issuance by the Bank or an  Affiliate of shares of stock of any
class, or of securities  convertible  into Shares of stock of another class, for
cash or property  or for labor or  services  either upon direct sale or upon the
exercise of rights or warrants to subscribe  therefor,  shall not affect, and no
adjustment shall be made with respect to, the number, class or Exercise Price of
Shares then subject to Awards or reserved for issuance under the Plan.

                                       5
<PAGE>

         11.      NON-TRANSFERABILITY OF AWARDS.

         Awards may not be sold, pledged, assigned, hypothecated, transferred or
disposed  of in any  manner  other  than by will  or by the law of  descent  and
distribution, or pursuant to the terms of a "qualified domestic relations order"
(within  the  meaning  of  Section  414(p) of the Code and the  regulations  and
rulings thereunder).

         12.      TIME OF GRANTING AWARDS.

         The date of grant of an Award shall, for all purposes,  be the later of
the date on which the Committee makes the  determination  of granting such Award
and the  Effective  Date.  Notice  of the  determination  shall be given to each
Participant  to whom an Award is so granted  within a reasonable  time after the
date of such grant.

         13.      EFFECTIVE DATE.

         The Plan shall be effective  as of August 12, 1998.  Awards may be made
prior to approval of the Plan by the stockholders of the Bank if the exercise of
Awards in the form of Options are conditioned upon  stockholder  approval of the
Plan.

         14.      APPROVAL BY STOCKHOLDERS.

         The Plan shall be approved by  stockholders  of the Bank within  twelve
(12) months before or after the Effective Date.

         15.      MODIFICATION OF AWARDS.

         At any  time,  and from  time to time,  the  Board  may  authorize  the
Committee to direct execution of an instrument providing for the modification of
any outstanding Award,  provided no such modification shall confer on the holder
of said Award any right or benefit  which could not be  conferred  on him by the
grant of a new Award at such time,  or impair the Award  without  the consent of
the holder of the Award.

         16.      AMENDMENT AND TERMINATION OF THE PLAN.

         The Board may from time to time  amend the terms of the Plan and,  with
respect to any Shares at the time not  subject to Awards,  suspend or  terminate
the Plan. No amendment, suspension or termination of the Plan shall, without the
consent  of any  affected  holders  of an Award,  alter or impair  any rights or
obligations under any Award theretofore granted.

         17.      CONDITIONS UPON ISSUANCE OF SHARES.

                  (a) COMPLIANCE  WITH SECURITIES  LAWS.  Shares of Common Stock
shall not be issued with  respect to any Award  unless the issuance and delivery
of such Shares  shall  comply with all relevant  provisions  of law,  including,
without  limitation,  the  Securities  Act of 1933,  as  amended,  the rules and
regulations promulgated thereunder,  any applicable state securities law and the
requirements of any stock exchange upon which the Shares may then be listed. The
Plan is intended to comply with Rule 16b-3,  and any provision of the Plan which
the Committee  determines in its sole and absolute discretion to be inconsistent
with said Rule shall,  to the extent of such  inconsistency,  be inoperative and
null and void, and shall not affect the validity of the remaining  provisions of
the Plan.

                  (b) SPECIAL CIRCUMSTANCES. The inability of the Bank to obtain
approval from any regulatory  body or authority  deemed by the Bank's counsel to
be  necessary  to the lawful  issuance  and sale of any Shares  hereunder  shall
relieve the Bank of any liability in respect of the non-issuance or sale of such
Shares.  As a condition to the exercise of any Option,  the Bank may require the
person exercising the Option to make such  representations and warranties as may
be necessary to assure the  availability  of an exemption from the  registration
requirements of federal or state securities law.

                                       6
<PAGE>

                  (c)  COMMITTEE  DISCRETION.   The  Committee  shall  have  the
discretionary  authority to impose in Agreements such  restrictions in Shares as
it may deem  appropriate  or  desirable,  including,  but not  limited  to,  the
authority to impose a right of first refusal or to establish  repurchase  rights
or both of these restrictions.

         18.      RESERVATION OF SHARES.

         The Bank,  during the term of the Plan, will reserve and keep available
a number of shares sufficient to satisfy the requirements of the Plan.

         19.      WITHHOLDING TAX.

         The Bank's  obligation to deliver Shares upon exercise of Options shall
be subject to the Participant's  satisfaction of all applicable  federal,  state
and local income and employment tax withholding  obligations.  The Committee, in
its discretion,  may permit the Participant to satisfy the obligation,  in whole
or in part,  by  irrevocably  electing to have the Bank withhold  Shares,  or to
deliver to the Bank  Shares  that he already  owns,  having a value equal to the
amount required to be withheld. The value of Shares to be withheld, or delivered
to the Bank,  shall be based on the  Market  Value of the Shares on the date the
amount of tax to be withheld is to be determined.  As an  alternative,  the Bank
may retain,  or sell without notice, a number of such Shares sufficient to cover
the amount required to be withheld.

         20.      NO EMPLOYMENT OR OTHER RIGHTS.

         In  no  event  shall  an  Employee's   eligibility  to  participate  or
participation  in the Plan create or be deemed to create any legal or  equitable
right of the  Employee or any other party to continue  service  with the Bank or
any Affiliate of such corporations. No Employee shall have a right to be granted
an Award or, having  received an Award,  the right to again be granted an Award.
However,  an Employee who has been granted an Award may, if otherwise  eligible,
be granted an additional Award or Awards.

         21.      GOVERNING LAW.

         The Plan shall be governed by and construed in accordance with the laws
of the  Commonwealth  of Virginia except to the extent that federal law shall be
deemed to apply.

                                       7

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00010-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00010-of-00352.parquet"}]]