EMPLOYMENT AGREEMENT

THIS AGREEMENT is made as of the 1^st day of April, 2002, between NetBank, Inc. (the Company), a Georgia corporation, and Steven F. Herbert (the Executive), a resident of the State of South Carolina, to be effective as of the date described in Section 1.10 hereof.

RECITALS:

The Company desires to employ the Executive and the Executive desires to accept such employment.

In consideration of the above premises and the mutual agreements hereinafter set forth, the parties hereby agree as follows:

1.     Definitions. Whenever used in this Agreement, the following terms and their variant forms shall have the meaning set forth below:

1.1           Agreement shall mean this Agreement and any Annexes and Exhibits incorporated herein together with any amendments hereto made in the manner described in this Agreement.

1.2           Affiliate shall mean any business entity that controls, is controlled by, or is under common control with, the Company.

1.3           Average Monthly Compensation shall mean the quotient determined by dividing (A) the sum of (i) the Executives Base Salary and (ii) Executive maximum Incentive Compensation (as defined in Section 4.2(a)) for the year of termination by (B) twelve (12).

1.4           Base Salary shall have the meaning set forth in Annex A. 

1.5           Business of the Company shall mean the business conducted by the Company and its Affiliates, which is currently banking, residential mortgage lending, commercial lending and leasing and provision of other financial services.

1.6           Cause shall mean:

1.6.1        With respect to termination by the Company,

(a) a material breach of the terms of this Agreement by the Executive (including, without limitation, failure by the Executive to perform his duties and responsibilities in the manner and to the extent required under this Agreement, or a breach of any representation or warranty of the Executive set forth herein); which breach remains uncured after the expiration of thirty (30) days following the delivery of written notice of such breach to the Executive by the Company; or

(b) conduct by the Executive that amounts to 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 willful violation of any final cease and desist order applicable to the Executive.

1.6.2        With respect to termination by the Executive,

(a) a material diminution in the powers, responsibilities or duties of Executive;

(b)  a material breach of the terms of this Agreement by the Company that remains uncured after the expiration of thirty (30) days following the delivery of written notice of such breach to the Company by the Executive; or

(c)  any requirement by the Company that the Executives services be rendered primarily at a location or locations other than the Business Location set forth in Annex A.

1.7           Change in Control has the meaning set forth in Annex B attached hereto.

1.8           Permanent Disability shall mean the total inability of the Executive to perform his duties under this Agreement for a period of ninety (90) consecutive days as certified by a physician chosen by the Company and reasonably acceptable to the Executive; provided, however, if the Executive is covered by a disability insurance policy, the term Permanent Disability shall have the meaning set forth in such policy.

1.9           Proprietary Information shall mean:

(a)           Information related to the Company or any Affiliate,

(i) which derives economic value, actual or potential, from not being generally known to or readily ascertainable by other persons who can obtain economic value from its disclosure or use; and

(ii) which is the subject of efforts that are reasonable under the circumstances to maintain its secrecy; and

(b) All tangible reproductions or embodiments of such information.

Assuming the criteria in (a)(i) and (a)(ii) above are satisfied, Proprietary Information includes, but is not limited to, technical and non-technical data related to the compilations, programs, methods, techniques, finances, actual or potential customers and suppliers, existing and future products, and employees of the Company or its Affiliates. Proprietary Information also includes information which has been disclosed to the Company or its Affiliates by a third party and which the Company or any Affiliate is obligated to treat as confidential.

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1.10         Term means the period commencing on the date on which the Merger (as defined in the Agreement and Plan of Merger dated as of November 18, 2001 by and between the Company, Resource Bancshares Mortgage Group, Inc. and Palmetto Acquisition Corp.) is consummated and ending on the second anniversary of such date.  Notwithstanding the foregoing, in the event the Merger does not occur, this Agreement shall be void.

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