EMPLOYMENT AGREEMENT

     THIS EMPLOYMENT AGREEMENT, dated as of this 19th day of January, 2005, by and between Fauquier Bankshares, Inc., a Virginia corporation (the Company), The Fauquier Bank, a Virginia banking corporation (the Bank), and Randy K. Ferrell (the Executive).

     In consideration of the mutual covenants and agreements set forth herein, the parties agree as follows:

Part I: General Employment Terms

     1. Employment and Duties. The Executive shall be employed by each of the Company and the Bank as their Chief Executive Officer. The Executive accepts such employment and agrees to perform the managerial duties and responsibilities of Chief Executive Officer. The Executive agrees to devote his time and attention on a full-time basis to the discharge of such duties and responsibilities of an executive nature as may be assigned him by the Companys Board of Directors, provided, that the Executive may accept any elective or appointed positions or offices with any duly recognized associations or organizations whose activities or purposes are closely related to the banking business or service to which would generate good will for the Company and its subsidiaries and affiliates.

     2. Term. The term of this Agreement (which term, together with any extension hereunder, is referred to as the Term) shall commence on January 15, 2005 (the Effective Date) and shall continue through December 31, 2008, unless terminated or extended as hereinafter provided. This Agreement shall be extended for successive one-year periods at December 31, 2005 and at each December 31 thereafter during the Term unless either party notifies the other in writing at least 90 days prior to such December 31 that the Agreement shall not be extended or further extended as the case may be.

     3. Compensation.

          (a) Base Salary. For the remainder of 2005, the Company shall pay the Executive an annual base salary not less than $206,000. Such base salary shall be paid to the Executive in accordance with established payroll practices of the Company. For 2006 and for each remaining year of the Term, the Compensation Committee (Compensation Committee) of the Board of Directors of the Company agrees to review the Executives base salary and to consider implementing changes to such base salary as it may deem appropriate; however, such base salary shall not be reduced at any time during the Term.

          (b) Annual Bonus. The Executive will be eligible to participate in an annual incentive plan that will establish measurable criteria and incentive compensation levels payable to the Executive for corporate performance in relation to defined benchmarks. The Compensation Committee or the Board of Directors of the Company, as the case may be, will consult with management to establish the targeted corporate performance levels for the Company on an annual basis consistent with the Companys business plan and objectives. Achievement of the targeted corporate performance levels will normally result in an annual cash bonus payment equal to 40% of the Executives then current annual base salary. Any bonus payments due hereunder shall be paid to the Executive no later than 75 days after the end of the year.