EXHIBIT 10.4
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                              SWVA BANCSHARES, INC.

                             1994 STOCK OPTION PLAN


         1. Purpose of the Plan. The Plan shall be known as the SWVA Bancshares,
Inc.  ("Corporation")  1994 Stock Option Plan (the  "Plan").  The purpose of the
Plan is to attract and retain the best  available  personnel  for  positions  of
substantial  responsibility  and to provide  additional  incentive  to officers,
directors and key employees of the Corporation,  or any present or future parent
or subsidiary  of the  Corporation  to promote the success of the business.  The
Plan is intended to provide for the grant of "Incentive  Stock Options,"  within
the meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the
"Code") and Non-Incentive  Stock Options,  options that do not so qualify.  Each
and every one of the provisions of the Plan relating to Incentive  Stock Options
shall be interpreted to conform to the requirements of Section 422 of the Code.

          2.      Definitions.  As used herein, the following definitions  shall
apply.

                  (a) "Award"  means the grant by the  Committee of an Incentive
Stock Option or a Non-Incentive  Stock Option,  or any combination  thereof,  as
provided in the Plan.

                  (b) "Bank" shall mean Southwest Virginia Savings Bank, FSB, or
any successor corporation thereto.

                  (c)  "Board"   shall  mean  the  Board  of  Directors  of  the
Corporation, or any successor or parent corporation thereto.

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

                  (e)  "Committee"   shall  mean  the  Stock  Option   Committee
appointed by the Board in accordance with paragraph 5(a) of the Plan.

                  (f) "Common Stock" shall mean common stock, par value $.10 per
share, of the Corporation, or any successor or parent corporation thereto.

                  (g)  "Continuous  Employment"  or  "Continuous  Status  as  an
Employee"  shall  mean  the  absence  of  any  interruption  or  termination  of
employment with the Corporation or any present or future Parent or Subsidiary of
the Corporation.  Employment shall not be considered  interrupted in the case of
sick  leave,  military  leave or any  other  leave of  absence  approved  by the
Corporation  or in the  case of  transfers  between  payroll  locations,  of the
Corporation  or between the  Corporation,  its  Parent,  its  Subsidiaries  or a
successor.

                  (h)  "Corporation"  shall mean the SWVA Bancshares,  Inc., the
parent corporation for the Bank, or any successor or Parent thereof.

                  (i)  "Director"  shall  mean  a  member  of the  Board  of the
Corporation, or any successor or parent corporation thereto.

                  (j) "Effective  Date" shall mean the date specified in Section
15 hereof.

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                  (k)  "Employee"   shall  mean  any  person   employed  by  the
Corporation or any present or future Parent or Subsidiary of the Corporation.

                  (l) "Incentive  Stock Option" or "ISO" shall mean an option to
purchase  Shares granted by the Committee  pursuant to Section 8 hereof which is
subject to the limitations and  restrictions of Section 8 hereof and is intended
to qualify under Section 422 of the Code.

                  (m)  "Non-Incentive  Stock Option" or "Non-ISO"  shall mean an
option to purchase Shares granted pursuant to Section 9 hereof,  which option is
not intended to qualify under Section 422 of the Code.

                  (n) "Option"  shall mean an Incentive or  Non-Incentive  Stock
Option  granted  pursuant to this Plan  providing the holder of such Option with
the right to purchase Common Stock.

                  (o) "Optioned  Stock" shall  mean  stock  subject to an Option
granted pursuant to the Plan.

                  (p) "Optionee" shall mean any person who receives an Option or
Award pursuant to the Plan.

                  (q)  "Parent"  shall mean any  present  or future  corporation
which would be a "parent  corporation" as defined in Subsections  424(e) and (g)
of the Code.

                  (r) "Participant" means any director,  officer or key employee
of the  Corporation or any Parent or Subsidiary of the  Corporation or any other
person  providing a service to the  Corporation who is selected by the Committee
to  receive  an Award,  or who by the  express  terms of the Plan is  granted an
Award.

                  (s) "Plan" shall  mean  the  SWVA  Bancshares, Inc. 1994 Stock
Option Plan.

                  (t) "Share" shall mean one share of the Common Stock.

                  (u) "Subsidiary"  shall mean any present or future corporation
which would be a "subsidiary  corporation" as defined in Subsections  424(f) and
(g) of the Code.

          3. Shares  Subject to the Plan.  Except as  otherwise  required by the
provisions of Section 13 hereof,  the aggregate number of Shares with respect to
which  Awards may be made  pursuant to the Plan shall not exceed  57,059.1  Such
Shares may either be authorized but unissued  shares,  treasury shares or shares
purchased in the market for Plan purposes.

         An Award shall not be considered to be made under the Plan with respect
to any Option  which  terminates  prior to its  exercise,  and new Awards may be
granted  under the Plan with  respect  to the  number of Shares as to which such
termination has occurred.

--------
1        Equal to 10% of shares issued in the initial stock offering.

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         4.       Six Month Holding Period.

                  A minimum of six months  must  elapse  between the date of the
grant of an Option and the date of the sale of Common Stock received through the
exercise of such Option.

          5.      Administration of the Plan.

                  (a) (i)  Composition of the Committee.  Except as indicated in
paragraph  5(a)(ii)  below,  the Plan  shall be  administered  by the  Committee
consisting of at least three non-employee Directors of the Corporation appointed
by the Board and serving at the pleasure of the Board. Officers,  Directors, key
employees  and  other  persons  who are  designated  by the  Committee  shall be
eligible to receive Awards under the Plan, and all persons designated as members
of the Committee  shall be  "disinterested  persons"  within the meaning of Rule
16b-3 under the Securities Exchange Act of 1934.

                           (ii) For the purpose of granting Awards to directors,
the  selection  of any  Director to whom  Awards may be granted,  as well as the
number of Shares  subject  to Awards,  must be  determined  by a  "disinterested
committee", as defined in Rule 16b-3 under the Securities Exchange Act of 1934.

                  (b) Powers of the Committee.  The Committee is authorized (but
only to the extent not  contrary  to the  express  provisions  of the Plan or to
resolutions adopted by the Board) to interpret the Plan, to prescribe, amend and
rescind  rules and  regulations  relating to the Plan, to determine the form and
content of Awards to be issued  under the Plan and to make other  determinations
necessary or advisable for the  administration  of the Plan,  and 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  shall be deemed the  action of the  Committee.  In no
event may the Committee  revoke  outstanding  Awards  without the consent of the
Participant.

                  The  Chairman of the  Corporation  and such other  officers as
shall  be  designated  by  the  Committee  are  hereby   authorized  to  execute
instruments  evidencing Awards on behalf of the Corporation and to cause them to
be delivered to the Participants.

                  (c)   Effect   of   Committee's   Decision.   All   decisions,
determinations  and   interpretations  of  the  Committee  shall  be  final  and
conclusive on all persons affected thereby.

          6.      Eligibility.

                            (i) Awards may be  granted  to  officers, Directors,
key employees and other persons. The Committee shall from time to time determine
the  officers,  Directors,  key employees and other persons who shall be granted
Awards under the Plan, the number to be granted to each such officer,  Director,
key employee and other persons  under the Plan,  and whether  Awards  granted to
each such  Participant  under the Plan shall be Incentive  and/or  Non-Incentive
Stock Options. In selecting Participants and in determining the number of Shares
of Common  Stock to be granted to each such  Participant  pursuant to each Award
granted  under the Plan,  the  Committee may consider the nature of the services
rendered by each such Participant, each such Participant's current and potential
contribution  to the Corporation and such other factors as the Committee may, in
its sole discretion, deem relevant.

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Officers,  Directors,  key  employees or other  persons who have been granted an
Award may, if otherwise eligible, be granted additional Awards.

                           (ii) The aggregate  fair  market value (determined as
of the date the Option is granted) of the Shares with respect to which Incentive
Stock Options are  exercisable  for the first time by each  Employee  during any
calendar year (under all Incentive Stock Option plans, as defined in Section 422
of the Code, of the Corporation or any present or future Parent or Subsidiary of
the Corporation) shall not exceed $100,000. Notwithstanding the prior provisions
of this Section 6, the  Committee  may grant  Options in excess of the foregoing
limitations,  provided said Options shall be clearly and specifically designated
as not being Incentive Stock Options.

                           (iii) In no event  shall  Shares  subject  to Options
granted to non-employee
Directors  in the  aggregate  under this Plan  exceed more than 30% of the total
number of Shares  authorized  for delivery under this Plan pursuant to Section 3
herein or 5% to any individual  non-employee Director. In no event shall Options
granted  to any  Employee  exceed  more than 25% of the  total  number of Shares
authorized for delivery under the Plan.

          7. Term of the Plan.  The Plan shall  continue in effect for a term of
ten (10) years from the Effective  Date,  unless sooner  terminated  pursuant to
Section 18  hereof.  No Option  shall be  granted  under the Plan after ten (10)
years from the Effective Date.

          8. Terms and Conditions of Incentive  Stock Options.  Incentive  Stock
Options may be granted only to  Participants  who are Employees.  Each Incentive
Stock Option granted pursuant to the Plan shall be evidenced by an instrument in
such  form as the  Committee  shall  from time to time  approve.  Each and every
Incentive  Stock Option  granted  pursuant to the Plan shall comply with, and be
subject to, the following terms and conditions:

                  (a)      Option Price.

                           (i) The price per Share at which each Incentive Stock
Option  granted under the Plan may be exercised  shall not, as to any particular
Incentive  Stock Option,  be less than the fair market value of the Common Stock
at the time such Incentive  Stock Option is granted.  For such purposes,  if the
Common Stock is traded otherwise than on a national  securities  exchange at the
time of the  granting  of an Option,  then the  exercise  price per Share of the
Optioned  Stock shall be not less than the mean  between the bid and asked price
on the date the  Incentive  Stock  Option is granted  or, if there is no bid and
asked price on said 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
exercise  price per Share shall be  determined by the  Committee.  If the Common
Stock is listed on a national securities exchange at the time of the granting of
an Incentive  Stock Option,  then the exercise price per Share shall be not less
than the average of the highest and lowest selling price on such exchange on the
date such  Incentive  Stock Option is granted or, if there were no sales on said
date,  then the  exercise  price shall be not less than the mean between the bid
and asked price on such date.

                           (ii) In the case of an Employee who owns Common Stock
representing more than ten percent (10%) of the outstanding  Common Stock at the
time the Incentive Stock Option is granted,  the Incentive Stock Option exercise
price  shall not be less than one  hundred  and ten  percent  (110%) of the fair
market  value of the  Common  Stock at the time the  Incentive  Stock  Option is
granted.


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                  (b)  Payment.  Full  payment  for each  Share of Common  Stock
purchased upon the exercise of any Incentive Stock Option granted under the Plan
shall be made at the time of exercise of each such  Incentive  Stock  Option and
shall be paid in cash (in United States Dollars),  Common Stock or a combination
of cash and Common Stock.  Common Stock  utilized in full or partial  payment of
the  exercise  price  shall be  valued at its fair  market  value at the date of
exercise.  The Corporation  shall accept full or partial payment in Common Stock
only to the extent  permitted by applicable law. No Shares of Common Stock shall
be issued until full payment therefor has been received by the Corporation,  and
no Optionee  shall have any of the rights of a  stockholder  of the  Corporation
until Shares of Common Stock are issued to him.

                  (c) Term of Incentive Stock Option. The term of exercisability
of each Incentive  Stock Option  granted  pursuant to the Plan shall be not more
than ten (10) years from the date each such  Incentive  Stock Option is granted,
provided that in the case of an Employee who owns stock  representing  more than
ten percent  (10%) of the Common  Stock  outstanding  at the time the  Incentive
Stock Option is granted, the term of the Incentive Stock Option shall not exceed
five (5) years.

                  (d)  Exercise  Generally.  Except  as  otherwise  provided  in
Section  10 hereof,  no  Incentive  Stock  Option  may be  exercised  unless the
Optionee  shall have been in the employ of the  Corporation  at all times during
the period  beginning with the date of grant of any such Incentive  Stock Option
and  ending on the date three (3) months  prior to the date of  exercise  of any
such Incentive Stock Option. The Committee may impose additional conditions upon
the  right of an  Optionee  to  exercise  any  Incentive  Stock  Option  granted
hereunder  which  are  not  inconsistent  with  the  terms  of the  Plan  or the
requirements for qualification as an Incentive Stock Option under Section 422 of
the Code.  Notwithstanding  anything herein to the contrary, the Incentive Stock
Option will be exercisable at the rate of 20% on the one year anniversary of the
date of  grant of such  Option  and 20%  annually  thereafter,  and will  remain
exercisable for up to ten years from such date of grant;  provided  however that
the  exercisability  of such Options shall be accelerated in the event of death,
disability or change in control in accordance with the Plan.

                  (e) Cashless  Exercise.  An Optionee who has held an Incentive
Stock  Option for at least six months may engage in the  "cashless  exercise" of
the Option. In a cashless  exercise,  an Optionee gives the Corporation  written
notice of the  exercise  of the Option  and  places an order  with a  registered
broker-dealer  or  equivalent  third party,  to sell part or all of the Optioned
Stock and to deliver enough of the proceeds to the Corporation to pay the Option
exercise price and any applicable  withholding  taxes.  If the Optionee does not
sell the Optioned Stock through a registered  broker-dealer  or equivalent third
party, he can give the Corporation  written notice of the exercise of the Option
and the third  party  purchaser  of the  Optioned  Stock  shall  pay the  Option
exercise price plus any applicable withholding taxes to the Corporation.

                  (f)  Transferability.   Any  Incentive  Stock  Option  granted
pursuant to the Plan shall be exercised  during an  Optionee's  lifetime only by
the Optionee to whom it was granted and shall not be assignable or  transferable
otherwise than by will or by the laws of descent and distribution.

          9.  Terms  and  Conditions  of  Non-Incentive   Stock  Options.   Each
Non-Incentive Stock Option granted pursuant to the Plan shall be evidenced by an
instrument in such form as the Committee  shall from time to time approve.  Each
and every  Non-Incentive  Stock Option granted pursuant to the Plan shall comply
with and be subject to the following terms and conditions.


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                  (a) Options  Granted to Directors.  Subject to the limitations
of Section  6(iii),  Non-  Incentive  Stock Options to purchase  2,852 shares of
Common Stock will be granted to each other Director who is not an Employee as of
the Effective  Date, at an exercise  price equal to the fair market value of the
Common Stock on such date of grant. Options may be granted to newly appointed or
elected non-employee Directors within the sole discretion of the Committee.  The
Option will be first  exercisable at the rate of 20% on the one year anniversary
of  stockholder  approval of the Plan and 20%  annually  thereafter  during such
periods  of  service  as a  director  or  director  emeritus,  and  will  remain
exercisable  for up to ten years  from  such  date of  grant.  Upon the death or
disability of the director or director emeritus,  or upon a change or control of
the Bank or the  Corporation  as provided at Section 13(b)  herein,  such Option
shall be deemed immediately 100% exercisable.  The price per Share at which such
Options granted shall be exercisable and shall be equal to the fair market value
of the Common Stock at the time such Options are granted. For such purposes,  if
the Common Stock is traded otherwise than on a national  securities  exchange at
the time of the  granting of the Options,  then the exercise  price per Share of
the  Optioned  Stock  shall be not less than the mean  between the bid and asked
price on the date the Options are granted or, if there is no bid and asked price
on said 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  exercise
price per Share shall be  determined  by the  Committee.  If the Common Stock is
listed on a  national  securities  exchange  at the time of the  granting  of an
Options, then the exercise price per Share shall be not less than the average of
the highest and lowest  selling  price on such exchange on the date such Options
are granted  or, if there were no sales on said date,  then the  exercise  price
shall be not less than the mean  between  the bid and asked  price on such date.
Such Options may be exercisable  for a period of ten years following the date of
grant without  regard to the continued  services of such Directors as a Director
or Director Emeritus. In the event of such person's death during the term of his
directorship,  such Options may be exercised by the personal  representative  of
his estate or person or persons to whom his rights  under such Option shall have
passed  by will  or by  laws  of  descent  and  distribution.  Unless  otherwise
inapplicable, or inconsistent with the provisions of this paragraph, the Options
to be granted to Directors hereunder shall be subject to all other provisions of
this Plan.

                  (b) Option Price. The exercise price per Share of Common Stock
for each  Non-Incentive  Stock Option granted  pursuant to the Plan,  other than
Options granted  pursuant to Section 9(a) herein,  shall be at such price as the
Committee  may determine in its sole  discretion,  but in no event less than the
fair market value of such Common Stock on the Date of Grant.

                  (c)  Payment.  Full  payment  for each  Share of Common  Stock
purchased upon the exercise of any Non-Incentive  Stock Option granted under the
Plan  shall be made at the time of  exercise  of each such  Non-Incentive  Stock
Option and shall be paid in cash (in United States  Dollars),  Common Stock or a
combination  of cash and Common Stock.  Common Stock utilized in full or partial
payment of the  exercise  price shall be valued at its fair market  value at the
date of exercise. The Corporation shall accept full or partial payment in Common
Stock only to the extent  permitted by applicable law. No Shares of Common Stock
shall be issued until full payment therefor has been received by the Corporation
and no Optionee shall have any of the rights of a stockholder of the Corporation
until the Shares of Common Stock are issued to him.

                  (d) Term.  The term of  exercisability  of each  Non-Incentive
Stock Option granted  pursuant to the Plan shall be not more than ten (10) years
from the date each such Non-Incentive Stock Option is granted.


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                  (e) Exercise  Generally.  The Committee may impose  additional
conditions upon the right of any Participant to exercise any Non-Incentive Stock
Option granted hereunder which is not inconsistent with the terms of the Plan.

                  (f)   Cashless   Exercise.   An   Optionee   who  has  held  a
Non-Incentive  Stock Option for at least six months may engage in the  "cashless
exercise"  of  the  Option.  In a  cashless  exercise,  an  Optionee  gives  the
Corporation  written  notice of the  exercise  of the Option and places an order
with a registered  broker-dealer  or equivalent third party, to sell part or all
of the Optioned Stock and to deliver  enough of the proceeds to the  Corporation
to pay the Option  exercise price and any applicable  withholding  taxes. If the
Optionee does not sell the Optioned Stock through a registered  broker-dealer or
equivalent  third  party,  he can give the  Corporation  written  notice  of the
exercise of the Option and the third party purchaser of the Optioned Stock shall
pay the Option  exercise  price  plus any  applicable  withholding  taxes to the
Corporation.

                  (g)  Transferability.  Any Non-Incentive  Stock Option granted
pursuant to the Plan shall be exercised  during an  Optionee's  lifetime only by
the Optionee to whom it was granted and shall not be assignable or  transferable
otherwise than by will or by the laws of descent and distribution.

         10.  Effect  of  Termination  of  Employment,  Disability  or  Death on
Incentive Stock Options.

                  (a)   Termination  of  Employment.   In  the  event  that  any
Optionee's employment with the Corporation shall terminate for any reason, other
than Permanent and Total Disability (as such term is defined in Section 22(e)(3)
of the Code) or death, all of any such Optionee's  Incentive Stock Options,  and
all of any such Optionee's  rights to purchase or receive Shares of Common Stock
pursuant  thereto,  shall  automatically  terminate  on the  earlier  of (i) the
respective  expiration  dates  of any such  Incentive  Stock  Options,  (ii) the
expiration of not more than three (3) months after the date of such  termination
of employment, or (iii) at such later date as determined by the Committee at the
time of the  grant of such  Award,  but only if,  and to the  extent  that,  the
Optionee was entitled to exercise any such  Incentive  Stock Options at the date
of such termination of employment. In the event that a subsidiary ceases to be a
subsidiary of the  Corporation,  the  employment of all of its employees who are
not  immediately  thereafter  employees  of the  Corporation  shall be deemed to
terminate  upon the date such  subsidiary  so ceases to be a  Subsidiary  of the
Corporation.  Notwithstanding  anything herein to the contrary, upon termination
of employment for "cause" as defined at 12 C.F.R.  563.39(b)(1) as determined by
the Board of Directors,  all Options held by such Participant  shall cease to be
exercisable as of the date of such termination of employment.

                  (b)  Disability.  In the event that any Optionee's  employment
with the  Corporation  shall  terminate as the result of the Permanent and Total
Disability of such  Optionee,  such  Optionee may exercise any  Incentive  Stock
Options  granted to him pursuant to the Plan at any time prior to the earlier of
(i) the respective  expiration dates of any such Incentive Stock Options or (ii)
the date which is one (1) year after the date of such termination of employment,
but only if, and to the extent  that,  the Optionee was entitled to exercise any
such Incentive Stock Options at the date of such termination of employment.

                  (c)  Death.  In the  event of the  death of an  Optionee,  any
Incentive  Stock Options granted to such Optionee may be exercised by the person
or persons to whom the Optionee's  rights under any such Incentive Stock Options
pass  by  will  or by the  laws  of  descent  and  distribution  (including  the
Optionee's estate during the period of  administration) at any time prior to the
earlier of (i) the respective

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expiration  dates of any such Incentive  Stock Options or (ii) the date which is
two (2) years after the date of death of such  Optionee  but only if, and to the
extent that,  the Optionee  was  entitled to exercise any such  Incentive  Stock
Options at the date of death.  For purposes of this Section 10(c), any Incentive
Stock Option held by an Optionee shall be considered  exercisable at the date of
his death if the only unsatisfied  condition  precedent to the exercisability of
such  Incentive  Stock Option at the date of death is the passage of a specified
period of time.  At the  discretion  of the  Committee,  upon  exercise  of such
Options the Optionee may receive Shares or cash or combination  thereof. If cash
shall be paid in lieu of  Shares,  such  cash  shall be equal to the  difference
between the fair  market  value of such  Shares and the  exercise  price of such
Options on the exercise date.

                  (d) Incentive Stock Options Deemed  Exercisable.  For purposes
of Sections 10(a), 10(b) and 10(c) above, any Incentive Stock Option held by any
Optionee  shall be  considered  exercisable  at the date of  termination  of his
employment if any such  Incentive  Stock Option would have been  exercisable  at
such date of termination of employment.

                  (e) Termination of Incentive Stock Options. To the extent that
any  Incentive  Stock  Option  granted  under  the  Plan to any  Optionee  whose
employment with the Corporation  terminates shall not have been exercised within
the  applicable  period set forth in this Section 10, any such  Incentive  Stock
Option,  and all rights to purchase or receive  Shares of Common Stock  pursuant
thereto,  as the case may be, shall  terminate on the last day of the applicable
period.

         11.  Effect  of  Termination  of  Employment,  Disability  or  Death on
Non-Incentive  Stock Options.  The terms and conditions of  Non-Incentive  Stock
Options  relating to the effect of the termination of an Optionee's  employment,
disability of an Optionee or his death shall be such terms and conditions as the
Committee shall, in its sole  discretion,  determine at the time of termination,
unless  specifically  provided for by the terms of the  Agreement at the time of
grant of the Award.  Notwithstanding  the foregoing,  the exercisability of such
Non-Incentive Options may be accelerated only in the event of death,  disability
or change in control in accordance with the Plan.

         12. Right of Repurchase and Restrictions on Disposition. The Committee,
in its sole discretion,  may include, as a term of any Incentive Stock Option or
Non-Incentive  Stock Option,  the right (the  "Repurchase  Right"),  but not the
obligation  for the  Corporation,  to repurchase all or any amount of the Shares
acquired by an Optionee pursuant to the exercise of any such Options. The intent
of  the  Repurchase  Right  is to  encourage  the  continued  employment  of the
Optionee.  The  Repurchase  Right  shall  provide  for,  among other  things,  a
specified  duration of the Repurchase  Right, a specified  price per Share to be
paid  upon  the  exercise  of the  Repurchase  Right  and a  restriction  on the
disposition  of the Shares by the Optionee  during the period of the  Repurchase
Right.  The  Repurchase  Right may permit the  Corporation to transfer or assign
such right to another party.  The Corporation may exercise the Repurchase  Right
only to the extent permitted by applicable law.

         13.      Recapitalization, Merger, Consolidation, Change in Control and
Similar Transactions.

                  (a)  Adjustment.   Subject  to  any  required  action  by  the
stockholders  of the  Corporation,  within the sole discretion of the Committee,
the aggregate  number of Shares of Common Stock for which Options may be granted
hereunder,  the number of Shares of Common  Stock  covered  by each  outstanding
Option,  and the  exercise  price per Share of Common Stock of each such Option,
shall all be proportionately adjusted for any increase or decrease in the number
of issued and outstanding

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Shares of Common Stock resulting from a subdivision or  consolidation  of Shares
(whether by reason of merger, consolidation, recapitalization, reclassification,
split-up,  combination  of  shares,  or  otherwise)  or the  payment  of a stock
dividend (but only on the Common Stock) or any other increase or decrease in the
number  of  such  Shares  of  Common  Stock  effected  without  the  receipt  of
consideration  by  the  Corporation   (other  than  Shares  held  by  dissenting
stockholders).

                  (b) Change in Control.  All  outstanding  Awards  shall become
immediately  exercisable in the event of a change in control of the Corporation,
as determined by the  Committee.  In the event of such a change in control,  the
Optionee shall, at the discretion of the Committee,  be entitled to receive cash
in an amount equal to the fair market  value of the Common Stock  subject to any
Incentive or Non-Incentive Stock Option over the Option Price of such Shares, in
exchange  for the  surrender of such Options by the Optionee on that date in the
event of a change in control of the  Corporation.  For  purposes of this Section
13,  "change in control"  shall mean:  (i) the execution of an agreement for the
sale of all, or a material portion,  of the assets of the Corporation;  (ii) the
execution of an agreement for a merger or recapitalization of the Corporation or
any merger or  recapitalization  whereby the  Corporation  is not the  surviving
entity;  (iii) a change of control of the Corporation,  as otherwise  defined or
determined by the Office of Thrift Supervision or regulations promulgated by it;
or (iv) the  acquisition,  directly or indirectly,  of the beneficial  ownership
(within  the  meaning  of  that  term  as it is used  in  Section  13(d)  of the
Securities  Exchange  Act of 1934  and the  rules  and  regulations  promulgated
thereunder)  of  twenty-five  percent  (25%) or more of the  outstanding  voting
securities  of the  Corporation  by any  person,  trust,  entity or group.  This
limitation  shall  not  apply to the  purchase  of  shares  by  underwriters  in
connection  with a public  offering of  Corporation  stock,  or the  purchase of
shares  of up to  25%  of any  class  of  securities  of  the  Corporation  by a
tax-qualified  employee  stock  benefit  plan which is exempt from the  approval
requirements,  set forth under 12 C.F.R.  ss.574.3(c)(1)(vi) as now in effect or
as may  hereafter be amended.  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.

                  (c) Extraordinary  Corporate  Action.  Subject to any required
action by the  stockholders  of the  Corporation,  in the event of any change in
control, recapitalization,  merger, consolidation, exchange of Shares, spin-off,
reorganization,  tender  offer,  liquidation  or other  extraordinary  corporate
action or event, the Committee,  in its sole  discretion,  shall have the power,
prior or subsequent to such action or event to:

                            (i)     appropriately adjust the number of Shares of
Common  Stock  subject to each Option,  the  exercise  price per Share of Common
Stock, and the consideration to be given or received by the Corporation upon the
exercise of any outstanding Option;

                           (ii)    cancel any or all previously granted Options,
provided that  appropriate  consideration  is paid to the Optionee in connection
therewith; and/or

                         (iii)    make such other adjustments in connection with
the Plan as the Committee, in its sole discretion,  deems necessary,  desirable,
appropriate or advisable;  provided,  however,  that no action shall be taken by
the Committee which would cause Incentive Stock Options granted  pursuant to the
Plan to fail to meet the requirements of Section 422 of the Code.


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<PAGE>



                  Except  as  expressly  provided  in  Sections  13(a) and 13(b)
hereof,  no Optionee shall have any rights by reason of the occurrence of any of
the events described in this Section 13.

                  (d)  Acceleration.  The Committee  shall at all times have the
power to accelerate  the exercise date of Options  previously  granted under the
Plan;  provided,  however, the exercisability of such Options may be accelerated
only in the event of death,  disability or change in control in accordance  with
the Plan.

         14. Time of Granting Options.  The date of grant of an Option under the
Plan  shall,  for all  purposes,  be the date on which the  Committee  makes the
determination  of  granting  such  Option.  Except,  however,  for  purposes  of
compliance  with Section 16 of the Securities  Exchange Act of 1934, the date of
grant of an Option shall be deemed the later of the date of grant or the date of
stockholder  approval  of the Plan.  Notice  of the grant of an Option  shall be
given to each  individual  to whom an Option is so granted  within a  reasonable
time after the date of such grant in a form determined by the Committee.

         15.  Effective  Date. The Plan shall become  effective upon the date of
approval of the Plan by the  stockholders  of the  Corporation.  On or after the
date of stockholder  approval of the Plan, the Committee may authorize the grant
of options to be awarded under the Plan.  Notwithstanding anything herein to the
contrary,  in no event  shall  awards  made  hereunder  be deemed  effective  or
exercisable  prior to issuance of a letter of approval or  non-objection  by the
Office of Thrift Supervision with respect to the Plan.

         16.   Approval  by   Stockholders.   The  Plan  shall  be  approved  by
stockholders  of the  Corporation  within twelve (12) months before or after the
date the Plan is approved by the Board.

         17.  Modification  of Options.  At any time and from time to time,  the
Board may  authorize  the  Committee to direct the  execution  of an  instrument
providing  for the  modification  of any  outstanding  Option,  provided no such
modification, extension or renewal shall confer on the holder of said Option any
right or  benefit  which  could  not be  conferred  on him by the grant of a new
Option at such time, or shall not materially  decrease the  Optionee's  benefits
under the Option  without  the  consent of the holder of the  Option,  except as
otherwise permitted under Section 18 hereof.

         18. Amendment and Termination of the Plan.

                  (a)  Action by the  Board.  The Board may  alter,  suspend  or
discontinue  the Plan,  except that no action of the Board may  increase  (other
than as provided in Section 13 hereof) the maximum number of Shares permitted to
be  optioned  under the Plan,  materially  increase  the  benefits  accruing  to
Participants   under  the  Plan  or  materially   modify  the  requirements  for
eligibility for  participation in the Plan unless such action of the Board shall
be subject to approval or ratification by the stockholders of the Corporation.

                  (b)  Change  in  Applicable  Law.  Notwithstanding  any  other
provision  contained  in the Plan,  in the event of a change in any  federal  or
state law,  rule or  regulation  which would make the exercise of all or part of
any previously granted Incentive and/or  Non-Incentive  Stock Option unlawful or
subject the  Corporation  to any penalty,  the  Committee  may restrict any such
exercise without the consent of the Optionee or other holder thereof in order to
comply with any such law, rule or regulation or to avoid any such penalty.


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<PAGE>


         19. Conditions Upon Issuance of Shares. Shares shall not be issued with
respect to any Option granted under the Plan 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 inability of the  Corporation to obtain  approval or  non-objection
from any regulatory body or authority deemed by the Corporation's  counsel to be
necessary to the lawful issuance and sale of any Shares  hereunder shall relieve
the Corporation of any liability in respect of the  non-issuance or sale of such
Shares.

         As a  condition  to the  exercise  of an Option,  the  Corporation  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.

         20. Reservation of Shares. During the term of the Plan, the Corporation
will  reserve and keep  available a number of Shares  sufficient  to satisfy the
requirements of the Plan.

         21. Unsecured Obligation.  No Participant under the Plan shall have any
interest in any fund or special asset of the  Corporation  by reason of the Plan
or the grant of any Incentive or  Non-Incentive  Stock Option under the Plan. No
trust  fund shall be  created  in  connection  with the Plan or any grant of any
Incentive or Non-Incentive Stock Option hereunder and there shall be no required
funding of amounts which may become payable to any Participant.

         22.  Withholding  Tax. The  Corporation  shall have the right to deduct
from all amounts paid in cash with  respect to the cashless  exercise of Options
under the Plan any taxes  required  by law to be withheld  with  respect to such
cash payments. Where a Participant or other person is entitled to receive Shares
pursuant to the  exercise of an Option  pursuant  to the Plan,  the  Corporation
shall have the right to require the  Participant or such other person to pay the
Corporation  the  amount  of any taxes  which the  Corporation  is  required  to
withhold with respect to such Shares,  or, in lieu thereof,  to retain,  or sell
without notice, a number of such Shares  sufficient to cover the amount required
to be withheld.

         23.  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.




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