EMPLOYMENT AGREEMENT

     THIS  AGREEMENT,  entered  into as of the 1st day of  April,  1999,  by and
between COMMUNITY BANK, a federally chartered savings bank, (the "Corporation"),
and P. Douglas Richard (the "Executive").

                                   WITNESSETH:

     WHEREAS,  the  Corporation  is  a  wholly-owned   subsidiary  of  Community
Financial Corporation, a Virginia corporation ("CFC");

     WHEREAS, the Corporation desires to retain the services of Executive on the
terms and  conditions  set forth herein and,  for the purpose of  effecting  the
same, the Boards of Directors of the  Corporation and CFC each has approved this
Employment   Agreement  and   authorized  its  execution  and  delivery  on  the
Corporation's behalf to the Executive; and

     WHEREAS,  the  Executive  is  presently  the duly  elected  and acting Vice
President of the  Corporation  and, as such, is a key  executive  officer of the
Corporation whose continued dedication,  availability, advice and counsel to the
Corporation  is deemed  important to the Board of Directors of the  Corporation,
the Corporation and its stockholders;

     WHEREAS, the services of the Executive, his experience and knowledge of the
affairs of the Corporation,  and his reputation and contacts in the industry are
valuable to the Corporation; and

     WHEREAS,  the Corporation wishes to attract and retain such  well-qualified
executives,  and it is in the  best  interests  of  the  Corporation  and of the
Executive to secure the continued services of the Executive; and

     WHEREAS,  the Corporation  considers the establishment and maintenance of a
sound  management  to be  part  of  its  overall  corporate  strategy  and to be
essential to protecting and enhancing the best interests of the  Corporation and
its stockholders; and

         NOW, THEREFORE,  to assure the Corporation of the Executive's continued
dedication, the availability of his advice and counsel to the Board of Directors
of the  Corporation,  and to induce the  Executive to remain and continue in the
employ of the  Corporation  and for other good and valuable  consideration,  the
receipt and adequacy whereof each party hereby acknowledges, the Corporation and
the Executive hereby agree as follows:

     1.  EMPLOYMENT:   The  Corporation  agrees  to,  and  does  hereby,  employ
Executive, and Executive agrees to, and does hereby, accept such employment, for
the period beginning as of the date hereof and ending on March 31,2000.

     2.  EXECUTIVE  DUTIES:  Executive  agrees  that,  during  the  term  of his
employment  under this Agreement and in his capacity as Vice President,  he will
devote his full


<PAGE>



business  time  and  energy  to  the  business,  affairs  and  interests  of the
Corporation and serve it diligently and to the best of his ability. The services
and duties to be performed by Executive shall be those appropriate to his office
and  title  as  currently  and  from  time to time  hereafter  specified  in the
Corporation's By-laws or otherwise specified by its Board of Directors.

     3.  COMPENSATION:  The Corporation  agrees to pay Executive,  and Executive
agrees to  accept,  as  compensation  for all  services  rendered  by him to the
Corporation  during the period of his  employment  under  this  Agreement,  base
salary at the annual rate of Seventy-Eight  Thousand Three Hundred  Seventy-Five
Dollars  ($78,375.00),  which  shall be  payable  in  monthly,  semi-monthly  or
bi-weekly  installments  in conformity  with  Corporation's  policy  relating to
salaried  employees.  Such  salary  may be  increased  in the sole and  absolute
discretion  of the  Corporation's  Board of Directors or Committee  thereof duly
authorized  by the Board to so act. The Board of Directors,  in its  discretion,
may cause the Corporation to pay bonuses to the Executive from time to time.

     4.  PARTICIPATION IN BENEFIT PLANS,  REIMBURSEMENT OF BUSINESS EXPENSES AND
OTHER  BENEFITS:  (i)  During  the  term of  employment  under  this  Agreement,
Executive  shall be eligible to  participate  in any pension,  group  insurance,
hospitalization,  deferred  compensation  or other  benefit,  bonus or incentive
plans  of the  Corporation  and CFC  presently  in  effect  (including,  without
limitation, CFC's stock option plans) or hereafter adopted by the Corporation or
CFC and generally  available to any employees of senior executive  status,  and,
additionally,  Executive  shall be  entitled  to have  the use of  Corporation's
facilities  and  executive  benefits as are  customarily  made  available by the
Corporation to its executive officers.

     (ii)  During  the  term  of  this  Agreement,   to  the  extent  that  such
expenditures  are  substantiated  by the  Executive  as required by the Internal
Revenue Service and policies of the Corporation, the Corporation shall reimburse
the Executive promptly for all expenditures  (including  travel,  entertainment,
parking,   business  meetings,   and  the  monthly  costs,  including  dues,  of
maintaining  memberships at appropriate clubs) made in accordance with rules and
policies  established  from  time to  time  by the  Board  of  Directors  of the
Corporation in pursuance and furtherance of the Corporation's  business and good
will.

     5.  ILLNESS:  In the event  Executive is unable to perform his duties under
this Agreement on a full-time basis for a period of six (6)  consecutive  months
by reason of illness or other  physical or mental  disability,  and at or before
the end of such  period he does not  return to work on a  full-time  basis,  the
Corporation   may  terminate  this  Agreement   without  further  or  additional
compensation  payment being due the Executive from the  Corporation  pursuant to
this  Agreement,  except benefits  accrued through the date of such  termination
under employee  benefit plans of the  Corporation.  These benefits shall include
long-term  disability  and other  insurance  or other  benefits  then  regularly
provided  by the  Corporation  to  disabled  employees,  as  well  as any  other
insurance benefits so provided.

     6.  DEATH:  In the  event  of  Executive's  death  during  the term of this
Agreement,  this Agreement  shall  terminate as of the end of the month in which
Executive dies. This Section 6



                                       2
<PAGE>




shall not affect  the rights of any person  under  other  contract  between  the
Executive and either the Corporation or CFC or under any life nsurance policy.

     7. TERMINATION WITHOUT CAUSE/RESIGNATION FOR GOOD REASON:

     (a)  Notwithstanding  the  provisions  of  Section 1  hereof,  the Board of
Directors  of  the  Corporation  may,  without  Cause  (as  hereafter  defined),
terminate the  Executive's  employment  under this  Agreement at any time in any
lawful  manner by giving not less than  thirty (30) days  written  notice to the
Executive.  The Executive  may resign for Good Reason (as hereafter  defined) at
any time by  giving  not less  than  thirty  (30)  days  written  notice  to the
Corporation.  If the Corporation  terminates the Executive's  employment without
Cause or the Executive resigns for Good Reason, then in either event:

         (i) The Executive shall be paid for twelve months following the date of
termination,  at such times as payment was theretofore made, the salary required
under Section 3 that the Executive  would have been entitled to receive had such
termination not occurred; and

         (ii) The  Corporation  shall  maintain in full force and effect for the
continued  benefit of the  Executive  for twelve  months  following  the date of
termination,  all employee  benefit plans and programs or  arrangements in which
the Executive was entitled to participate immediately prior to such termination,
provided that  continued  participation  is possible under the general terms and
provisions  of  such  plans  and  programs.   In  the  event  that   Executive's
participation  in any such plan or  program  is barred,  the  Corporation  shall
arrange to provide the Executive  with benefits  substantially  similar to those
which the Executive was entitled to receive under such plans and program.

     (b) For purposes of this Agreement, "Good Reason" shall mean:

         (i) The assignment of duties to the Executive by the Corporation  which
(A) are materially  different from the Executive's duties on the date hereof, or
(B)  result  in  the  Executive  having   significantly  less  authority  and/or
responsibility  than he has on the date  hereof,  without  his  express  written
consent;

         (ii) The removal of the  Executive  from or any failure to re-elect him
to the position of Vice  President,  except in connection  with a termination of
his  employment  by the  Corporation  for Cause or by reason of the  Executive's
disability;

         (iii) A reduction by the Corporation of the Executive's  base salary to
less than Seventy-Eight Thousand Three Hundred Seventy-Five Dollars ($78,375.00)
per year;

         (iv) The  failure of the  Corporation  to provide  the  Executive  with
substantially  the same fringe  benefits  (including  paid  vacations) that were
provided to him immediately prior to the date hereof; or




                                       3
<PAGE>




         (v) The  failure of the  Corporation  to obtain the  assumption  of and
agreement to perform this Agreement by any successor as  contemplated in Section
10(c) hereof.

     (c) Resignation by the Executive for Good Reason shall be communicated by a
written  Notice of  Resignation to the  Corporation.  A "Notice of  Resignation"
shall mean a notice  which shall  indicate  the  specific  provision(s)  in this
Agreement  relied  upon and shall set forth in  reasonable  detail the facts and
circumstances claimed to provide a basis for a resignation for Good Reason.

     (d) If within thirty (30) days after any Notice of Resignation is given the
Corporation  notifies  the  Executive  that  a  dispute  exists  concerning  the
resignation  for Good Reason and that it is requesting  arbitration  pursuant to
Section 17, the Corporation  shall continue to pay the Executive his full salary
and benefits as  described in Sections 3 and 4, as and when due and payable,  at
least  until  such  time  as a  final  decision  is  reached  by  the  panel  of
arbitrators.  If Good Reason for  resignation  by the  Executive  is  ultimately
determined not to exist, then all sums paid by the Corporation to the Executive,
including  but not  limited  to the cost to the  Corporation  of  providing  the
Executive such fringe benefits, from the date of such resignation to the date of
the resolution of such dispute shall be promptly  repaid by the Executive to the
Corporation  with  interest  at the  rate  charged  from  time  to  time  by the
Corporation  to its most  substantial  customers  for  unsecured  extensions  of
credit.

     A failure by the  Corporation to notify the Executive that a dispute exists
concerning  the  resignation  for Good Reason  within thirty (30) days after any
Notice  of  Resignation  is  given  shall  constitute  a  final  waiver  by  the
Corporation  of its right to contest either that such  resignation  was for Good
Reason or its obligations to the Executive under Section 7(a) hereof.

     (e) If the Executive's  employment terminates after a Change of Control (as
defined in Section 9 hereof),  the payments to which he is entitled  pursuant to
Section  9 shall  be in lieu of any  payment  to which  he  might  otherwise  be
entitled under the terms of this Section 7.

     8. RESIGNATION - TERMINATION FOR CAUSE - REGULATORY TERMINATION:

     (a)  Notwithstanding  the  provisions of Section 1 of this  Agreement,  the
Board of Directors of the Corporation may, in its sole discretion, terminate the
Executive's  employment for Cause.  For the purposes of this Agreement,  "Cause"
shall mean personal  dishonesty,  incompetence,  willful  misconduct,  breach of
fiduciary duty involving personal profit,  intentional failure to perform stated
duties,  willful  violation of any law, rule, or regulation  (other than traffic
violations or similar  offenses) or final  cease-and-desist  order,  or material
breach of any provision of this Agreement.

     No act or omission to act by the  Executive in reliance  upon an opinion of
counsel to the Corporation shall be deemed to be willful.




                                       4
<PAGE>




     (b) Termination of the Executive's  employment by the Corporation for Cause
pursuant to Section 8(a) shall be  communicated by written Notice of Termination
to the  Executive.  A "Notice of  Termination"  shall mean a notice  which shall
indicate the specific termination provision(s) in this Agreement relied upon and
shall set forth  with  particularity  the facts  and  circumstances  claimed  to
provide a basis for  termination  of employment for Cause under the provision so
indicated.

     If within  ninety  (90) days after any Notice of  Termination  is given the
Executive  notifies  the  Corporation  that  a  dispute  exists  concerning  the
termination for Cause and that he is requesting  arbitration pursuant to Section
17, the  Corporation  shall  continue to pay the  Executive  his full salary and
benefits as described in Sections 3 and 4, as and when due and payable, at least
until such time as a final decision is reached by the panel of arbitrators. If a
termination  for Cause by the Corporation is challenged by the Executive and the
termination is ultimately determined to be justified,  then all sums paid by the
Corporation to the Executive pursuant to this Section 8(b), plus the cost to the
Corporation  of providing  the Executive  such fringe  benefits from the date of
such  terminaticn  to the  date of the  resolution  of such  dispute,  shall  be
promptly  repaid by the Executive to the  Corporation  with interest at the rate
charged from time to time by the Corporation,  to its most substantial customers
for  unsecured  lines of  credit.  Should it  ultimately  be  determined  that a
termination by the Corporation pursuant Section 8(a) was not justified, then the
Executive  shall  be  entitled  to  retain  all  sums  paid to him  pending  the
resolution of such dispute and he shall be entitled to receive, in addition, the
payments and other benefits provided for in Section 7(a).

     A failure by the Executive to notify the Corporation  that a dispute exists
concerning the termination for Cause within ninety (90) days after the Notice of
Termination  is given shall  constitute a final  waiver by the  Executive of his
right to contest that such termination was for Cause.

     (c) In the event  that  Executive  resigns  from or  otherwise  voluntarily
terminates his  employment by the  Corporation at any time (except a termination
for Good Reason pursuant to Section 7 hereof), or if the Corporation  rightfully
terminates the Executive's  employment for Cause, this Agreement shall terminate
upon the date of such  resignation or  termination of employment for Cause,  and
(subject to Section 8(b) the Corporation  thereafter shall have no obligation to
make any further  payments  under this  Agreement,  provided  that the Executive
shall be entitled to receive any benefits,  insured or otherwise,  that he would
otherwise be eligible to receive under any benefit plans of the  Corporation  or
CFC or any affiliate of the Corporation or CFC.

     (d)  If  Executive  is  suspended   and/or   temporarily   prohibited  from
participating  in the conduct of the  Corporation's  affairs by a notice  served
under Sections 8(e)(3) or 8(g)(1) [12 U.S.C.  ss.ss.  1818(e)(3) and 1818(g)(1)]
of the Federal Deposit  Insurance Act, 12 U.S.C.  ss. 1811 et SEQ. (the "Federal
Deposit  Insurance Act"),  the  Corporation's  obligations  under this Agreement
shall be  suspended  as of the date of  service  unless  stayed  by  appropriate
proceedings.  If the charges in the notice are dismissed, the Corporation may in
its discretion (i) pay Executive all or



                                       5
<PAGE>




part of the compensation withheld while its contract obligations were suspended,
and (ii)  reinstate  (in whole or in part)  any of its  obligations  which  were
suspended.

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

     If the  Corporation is in default [as default is defined in Section 3(x)(1)
of the Federal  Deposit  Insurance  Act], all  obligations  under this Agreement
shall  terminate as of the date of default,  but this paragraph shall not affect
any vested rights of the contracting parties.

     Except to the extent it is determined  that  continuation of this Agreement
is necessary for the continued  operation of the  Corporation,  all  obligations
under this Agreement shall be terminated:

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

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

     Any rights of the parties that have already vested,  however,  shall not be
affected by such action.

     9. CHANGE OF CONTROL:  If the  Executive's  employment  by the  Corporation
shall be terminated  in connection  with or subsequent to a Change in Control of
CFC  by  (i)  the  Corporation  other  than  for  Cause  or as a  result  of the
Executive's  death,  disability  or  retirement  or (ii) the  Executive for Good
Reason, then the Corporation shall:

     (a)  Pay  to the  Executive,  in one  lump  sum  payment  on  the  date  of
termination or the date on which the Change in Control of CFC occurs,  whichever
first  occurs,  a cash  severance  amount  equal to 1.5  times  the  total  cash
compensation  (including  bonus)  paid to the  Executive  during the twelve (12)
months ending with the termination of the Executive's employment; and

     (b) Maintain and provide for a period  ending at the earlier of (i) one (1)
year after the date of termination or (ii) the date of the Executive's full time
employment by another  employer  (provided  that the Executive is entitled under
the  terms  of such  employment  to  benefits  substantially  similar  to  those
described in this Subsection (b)), at no cost to the Executive,  the Executive's
continued  participation  in all group  insurance,  life  insurance,  health and
accident,



                                       6
<PAGE>




disability and other employee benefit plans,  programs and arrangements in which
the  Executive  was  entitled to  participate  immediately  prior to the date of
termination  (other than  retirement  plans or stock  compensation  plans of the
Corporation).

     (c) For  purposes of this  Agreement,  a Change of Control of CFC occurs in
any of the following events:  (i) The acquisition by any "person" or "group" (as
defined  in  Sections  13(d) and 14(d) of the  Securities  Exchange  Act of 1934
("Exchange  Act")),  other  than  CFC,  any  subsidiary  of CFC  or  any  CFC or
subsidiary's  employee  benefit plan,  directly or  indirectly,  as  "beneficial
owner" (as defined in Rule 13d-3,  under the Exchange  Act) of securities of CFC
representing  twenty percent (20%) or more of either the then outstanding shares
or the combined  voting power of the then  outstanding  securities  of CFC; (ii)
Either a majority of the  directors of CFC elected at CFC's annual  stockholders
meeting shall have been nominated for election other than by or at the direction
of the "incumbent directors" of CFC, or the "incumbent directors" shall cease to
constitute a majority of the  directors of CFC. The term  "incumbent  director",
shall mean any  director  who was a  director  of CFC on January 1, 1997 and any
individual  who becomes a director of CFC  subsequent to January 1, 1997 and who
is elected or nominated by or at the  direction  of at least  two-thirds  of the
then incumbent  directors  (iii) The  shareholders  of CFC approve (x) a merger,
consolidation  or other  business  combination of CFC with any other "person" or
"group"  (as  defined  in  Sections  13(d)  and  14(d) of the  Exchange  Act) or
affiliate thereof, other than a merger or consolidation that would result in the
outstanding  common  stock  of  CFC  immediately  prior  thereto  continuing  to
represent  either by remaining  outstanding  or by being  converted  into common
stock of the surviving  entity or a parent or affiliate  thereof) at least fifty
percent (50%) of the outstanding common stock of CFC or such surviving entity or
a parent  or  affiliate  thereof  outstanding  immediately  after  such  merger,
consolidation  or  other  business  combination,  or  (y)  a  plan  of  complete
liquidation  of CFC or an agreement for the sale or disposition by CFC of all or
substantially all of CFC's assets; or (iv) Any other event or circumstance which
is not covered by the foregoing  subsections but which the Board of Directors of
CFC  determines to affect  control of CFC and with respect to which the Board of
Directors  adopts a  resolution  that the event or  circumstance  constitutes  a
Change of Control for purposes of the Agreement.

     The  Control  Change Date is the date on which an event  described  in (i),
(ii), (iii) or (iv) occurs.

     10. LITIGATION - OBLIGATIONS - SUCCESSORS:

     (a) If litigation  shall be brought or arbitration  commenced to challenge,
enforce or interpret any  provision of this  Agreement,  and such  litigation or
arbitration  does  not end  with  judgment  in  favor  of the  Corporation,  the
Corporation  hereby  agrees  to  indemnify  the  Executive  for  his  reasonable
attorney's fees and disbursements incurred in such litigation or arbitration.

     (b) The Corporation's  obligation to pay the Executive the compensation and
benefits  and to make the  arrangements  provided  herein  shall be absolute and
unconditional and shall not be affected by any circumstances, including, without
limitation, any set-off, counterclaim,  recoupment, defense or other right which
the Corporation may have against him or anyone else.



                                       7
<PAGE>




All amounts payable by the Corporation hereunder shall be paid without notice or
demand.  Except as expressly  provided in Sections 7(d) and 8(b), each and every
payment made  hereunder by the  Corporation  shall be final and the  Corporation
will not seek to recover all or any part of such payment  from the  Executive or
from whosoever may be entitled thereto, for any reason whatsoever. The Executive
shall not be required to mitigate the amount of any payment provided for in this
Agreement by seeking  other  employment  or  otherwise;  provided,  if Executive
secures  other  full time  employment  after a  termination  without  Cause or a
resignation  for Good Reason  (other than self  employment  or  employment by an
entity he owns or controls),  the obligations of the  Corporation  under Section
7(a) shall be reduced dollar for dollar by the cash compensation received by the
Executive  from  such  other  employment.   This  Section  10(b)  shall  not  be
interpreted  to  require  or  permit  any  reduction  of  benefits  to which the
Executive may be entitled under Section 9.

     (c) The Corporation will require any successor (whether direct or indirect,
by purchase, merger,  consolidation or otherwise) to all or substantially all of
the  business  and/or  assets  of the  Corporation,  or either  one of them,  by
agreement in form and  substance  satisfactory  to the  Executive,  to expressly
assume and agree to  perform  this  Agreement  in its  entirety.  Failure of the
Corporation  to obtain such  agreement  prior to the  effectiveness  of any such
succession  shall be a breach of this  Agreement and shall entitle the Executive
to the compensation  described in Section 7(a) or Section 9, as appropriate.  As
used in this Agreement,  "Corporation" shall mean Community Federal Savings Bank
and any successor to its business  and/or assets as aforesaid which executes and
delivers the  agreement  provided for in this Section  10(c) or which  otherwise
becomes bound by all the terms and  provisions of this Agreement by operation of
law.

     11. LIMITATION OF BENEFITS:

     It is the  intention  of the  parties  that no  payment  be made or benefit
provided to the Executive that would constitute an ""excess parachute  payment'"
within the meaning of Section  280G of the  Internal  Revenue  Code of 1986,  as
amended (the Code) and any regulations  thereunder,  thereby resulting in a loss
of an income tax deduction by the Corporation or the imposition of an excise tax
on Executive  under  Section 4999 of the Code.  If the  independent  accountants
serving  as  auditors  for the  Corporation  immediately  prior to the date of a
Change  of  Control  determine  that  some or all of the  payments  or  benefits
scheduled  under  this  Agreement,  when  combined  with any other  payments  or
benefits  provided  to  the  Executive  on a  Change  of  Control  by  CFC,  the
Corporation  and  any  affiliate  of  CFC  or  the  Corporation  required  to be
aggregated  with CFC or the  Corporation  under Section 280G of the Code,  would
constitute  nondeductible  excess  parachute  payments by the Corporation  under
Section  280G of the Code,  then the payments or benefits  scheduled  under this
Agreement  will be reduced to one dollar less than the maximum  amount which may
be paid or  provided  without  causing any such  payments or benefits  scheduled
under  this  Agreement  or  otherwise  provided  on a Change  of  Control  to be
nondeductible.  The  determination  made  as to the  reduction  of  benefits  or
payments required  hereunder by the independent  accountants shall be binding on
the parties. The Executive shall have the right to designate within a reasonable
period  which  payments  or  benefits  scheduled  under this  Agreement  will be
reduced; provided, however, that if no direction is received from



                                       8
<PAGE>




the  Executive,  the  Corporation  shall  implement  the  reductions  under this
Agreement in its discretion.

     12.  NOTICES:  For the  purposes of this  Agreement,  notices and all other
communications  provided for in the  Agreement  shall be in writing and shall be
deemed  to have been  duly  given  when  delivered  or  mailed by United  States
registered  or  certified  mail,  return  receipt  requested,  postage  prepaid,
addressed as follows:

         If to the Executive:           500 Waterwheel Road
                                        Chesapeake, Virginia 23322

         If to the Corporation:         Community Bank
                                        38 N Central Avenue
                                        P. O. Box 1209
                                        Staunton, VA 24402-1209

or at such other address as any party may have furnished to the other in writing
in  accordance  herewith,  except  that  notices of change of  address  shall be
effective only upon receipt.

     13.  MODIFICATION  -  WAIVERS  -  APPLICABLE  LAW:  No  provisions  of this
Agreement may be modified, waived or discharged unless such waiver, modification
or discharge is agreed to in writing,  signed by the  Executive and on behalf of
the Corporation by such officer as may be  specifically  designated by the Board
of Directors of the Corporation. No waiver by either party hereto at any time of
any breach by the other party hereto of, or in compliance with, any condition or
provision of this  Agreement to be performed by such other party shall be deemed
a waiver of similar or dissimilar  provision or conditions at the same or at any
prior or subsequent time. No agreements or  representations,  oral or otherwise,
express or implied,  with respect to the subject matter hereof have been made by
either party which are not set forth expressly in this Agreement.  The validity,
interpretation, construction and performance of this Agreement shall be governed
by the laws of the State of Virginia.

     14. INVALIDITY - ENFORCEABILITY:  The invalidity or unenforceability of any
provisions of this Agreement shall not affect the validity or  enforceability of
any other  provision  of this  Agreement,  which shall  remain in full force and
effect.  Any provision in this Agreement which is prohibited or unenforceable in
any  jurisdiction  shall, as to such  jurisdiction,  be ineffective  only to the
extent cf such prohibition or unenforceability without invalidating or affecting
the remaining provisions hereof, and any such prohibition or unenforceability in
any jurisdiction shall not invalidate or render  unenforceable such provision in
any other jurisdiction.

     15. SUCCESSOR  RIGHTS:  This Agreement shall inure to the benefit of and be
enforceable by the  Executive's  personal or legal  representatives,  executors,
administrators,  successors,  heirs,  distributees,  devisees and  legatees.  If
Executive  should die while any amounts would still be payable to him hereunder,
all such amounts,  unless otherwise provided herein, shall be paid in accordance
with  the  terms  of this  Agreement  to his  executor  or,  if there is no such
executor, to his estate.



                                       9
<PAGE>




     16.  HEADINGS:  Descriptivc  headings  contained in this  Agreement are for
convenience  only and shall not control or affect the meaning or construction of
any provision hereof.

     17.  ARBITRATION:  Any dispute,  controversy  or claim  arising under or in
connection  with this Agreement  shall be settled  exclusively  by  arbitration,
conducted  before  a panel  of  three  arbitrators,  in  Staunton,  Virginia  in
accordance  with the Commercial  Arbitration  Rules of the American  Arbitration
Association then in effect.  The Corporation shall pay all  administrative  fees
associated with such  arbitration.  Judgment may be entered on the  arbitrator's
award in any  court  having  jurisdiction.  Subject  to  Section  10(a),  unless
otherwise  provided in the rules of the American  Arbitration  Association,  the
arbitrators  shall,  in their award,  allocate  between the parties the costs of
arbitration,  which shall include reasonable attorneys' fees and expenses of the
parties,  as well as the arbitrator's fees and expenses,  in such proportions as
the arbitrators deem just.

     18. CONFIDENTIALITY - NONSOLICITATION:

     (a) The Executive  acknowledges  that the Corporation may disclose  certain
confidential  information to the Executive  during the term of this Agreement to
enable him to perform his duties  hereunder.  The Executive hereby covenants and
agrees that he will not,  without the prior written consent of the  Corporation,
during the term of this Agreement or at any time thereafter,  disclose or permit
to be  disclosed  to  any  third  party  by  any  method  whatsoever  any of the
confidential  information of the  Corporation.  For purposes cf this  Agreement,
"confidential  information"  shall  include,  but not be limited to, any and all
records, notes, memoranda, data, ideas, processes, methods, techniques, systems,
formulas,  patents,  models,  devices,  programs,  computer software,  writings,
research,   personnel  information,   customer  informaticn,  the  Corporation's
financial information, plans, or any other information of whatever nature in the
possession  or  control  of the  Corporation  which  has not been  published  or
disclosed  to  the  general  public,  or  which  gives  to  the  Corporation  an
opportunity  to obtain an advantage over  competitors  who do not know of or use
it. The Executive further agrees that if his employment  hereunder is terminated
for any reason,  he will leave with the  Corporation and will not take originals
or  copies of any and all  records,  papers,  programs,  computer  software  and
documents and all matter of whatever  nature which bears secret or  confidential
information of the Corporation.

     The  foregoing  paragraph  shall not be applicable if and to the extent the
Executive is required to testify in a judicial or regulatory proceeding pursuant
to an order of a judge or  administrative  law judge issued after the  Executive
and his legal counsel urge that the aforementioned confidentiality be preserved.

     The foregoing  covenants  will not prohibit the Executive  from  disclosing
confidential  or other  information to other employees of the Corporation or any
third parties to the extent that such disclosure is necessary to the performance
of his duties under this Agreement.




                                       10
<PAGE>



     (b)  Subject  to  Section  18(c),  during  the term of this  Agreement  and
throughout  any  further  period  that  he is an  officer  or  employee  of  the
Corporation,  and for a  period  of  twelve  (12)  months  from  and  after  the
termination of the last such position held by the Executive,  or for a period of
twelve (12) months from the date of entry by a court of  competent  jurisdiction
of a final  judgment  enforcing  this  covenart  in the  event  of a  breach  by
Executive,  whichever is later,  Employee covenants and agrees that he will not,
without the prior written  consent of the  Corporation,  solicit any existing or
former  customer or  employee  of the  Corporation  for any  competing  business
regardless of its location.

     (c) If the Corporation  terminates the employment of the Executive  without
Cause or the  Executive  resigns  for Good  Reason,  the  covenant  set forth in
Section 18(b) shall not apply.

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

                                            "EXECUTIVE"

ATTEST: /s/                                 /s/ P. Douglas Richard
       -----------------------------        -------------------------------
                                            P. Douglas Richard

                                            COMMUNITY BANK
                                            ("CORPORATION")

ATTEST: /s/                                 By: /s/ Thomas W. Winfree, President
       -----------------------------        ------------------------------------
                                                    AUTHORIZED OFFICER

                                                     4/14/99




                                       11
<PAGE>