EXHIBIT 10.2 Employment Agreement with D. W. Shilling




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                              EMPLOYMENT AGREEMENT


         THIS AGREEMENT, is entered into this 19 th day of May 1999, ("Effective
Date") by and between Southwest  Virginia Savings Bank, FSB (the "Savings Bank")
and Mr. D. W. Shilling (the "Executive").

                                   WITNESSETH

         WHEREAS, the Executive has heretofore been employed by the Savings Bank
as the Chief Executive  Officer and is experienced in all phases of the business
of the Savings Bank; and

         WHEREAS,  the  Savings  Bank  desires to be ensured of the  Executive's
continued active participation in the business of the Savings Bank; and

         WHEREAS,  in order to induce the  Executive  to remain in the employ of
the Savings Bank and in consideration  of the Executive's  agreeing to remain in
the employ of the Savings  Bank,  the parties  desire to specify the  continuing
employment relationship between the Savings Bank and the Executive;

         NOW  THEREFORE,  in  consideration  of  the  premises  and  the  mutual
agreements herein contained, the parties hereby agree as follows:

         1.  Employment.  The Savings Bank hereby  employs the  Executive in the
capacity of President and Chief Executive Officer.  The Executive hereby accepts
said employment and agrees to render such administrative and management services
to the Savings Bank and to SWVA  Bancshares,  Inc.  ("Parent")  as are currently
rendered  and as are  customarily  performed  by persons  situated  in a similar
executive capacity. The Executive shall promote the business of the Savings Bank
and Parent. The Executive's other duties shall be such as the Board of Directors
for the Savings Bank (the "Board of Directors" or "Board") may from time to time
reasonably direct, including normal duties as an officer of the Savings Bank.

         2. Term of Employment.  The term of employment of Executive  under this
Agreement  shall be for the period  commencing on the Effective  Date and ending
thirty-six (36) months thereafter  ("Term").  Additionally,  on, or before, each
annual  anniversary  date from the Effective Date, the Term of employment  under
this Agreement shall be extended for up to an additional  period beyond the then
effective  expiration date upon a  determination  and resolution of the Board of
Directors  that the  performance of the Executive has met the  requirements  and
standards of the Board,  and that the Term of such Agreement  shall be extended.
References  herein to the Term of this Agreement shall refer both to the initial
term and successive terms.





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         3.    Compensation, Benefits and Expenses.

               (a) Base Salary.  The Savings Bank shall  compensate  and pay the
Executive during the Term of this Agreement a minimum base salary at the rate of
$105,000 per annum ("Base  Salary"),  payable in cash not less  frequently  than
monthly;  provided,  that the rate of such salary shall be reviewed by the Board
of Directors not less often than annually,  and the Executive  shall be entitled
to receive increases at such percentages or in such amounts as determined by the
Board of Directors. The base salary may not be decreased without the Executive's
express written consent.

               (b)  Discretionary  Bonus.  The  Executive  shall be  entitled to
participate in an equitable manner with all other senior management employees of
the Savings Bank in discretionary bonuses that may be authorized and declared by
the Board of Directors to its senior management executives from time to time. No
other  compensation  provided for in this Agreement shall be deemed a substitute
for the Executive's right to participate in such discretionary  bonuses when and
as declared by the Board.

               (c)  Participation in Benefit and Retirement Plans. The Executive
shall be entitled to  participate in and receive the benefits of any plan of the
Savings Bank which may be or may become applicable to senior management relating
to pension or other retirement benefit plans,  profit-sharing,  stock options or
incentive plans, or other plans,  benefits and privileges given to employees and
executives of the Savings Bank, to the extent  commensurate with his then duties
and responsibilities, as fixed by the Board of Directors of the Savings Bank.

               (d)  Participation in Medical Plans and Insurance  Policies.  The
Executive  shall be entitled to  participate  in and receive the benefits of any
plan or policy of the  Savings  Bank  which may be or may become  applicable  to
senior  management  relating to life insurance,  short and long term disability,
medical, dental, eye-care, prescription drugs or medical reimbursement plans.


               (e) Vacations and Sick Leave.  The Executive shall be entitled to
paid annual vacation leave in accordance  with the policies as established  from
time to time by the  Board of  Directors,  which  shall in no event be less than
four weeks per annum.  The  Executive  shall also be  entitled to an annual sick
leave benefit as established by the Board for senior management employees of the
Savings  Bank.  The  Executive  shall not be entitled to receive any  additional
compensation from the Savings Bank for failure to take a vacation or sick leave,
nor shall he be able to accumulate  unused  vacation or sick leave from one year
to the next, except to the extent authorized by the Board of Directors.

               (f) Expenses.  The Savings Bank shall  reimburse the Executive or
otherwise  provide  for or pay  for  all  reasonable  expenses  incurred  by the
Executive in furtherance  of, or in connection  with the business of the Savings
Bank,  including,  but  not by  way  of  limitation,  automobile  and  traveling
expenses, and all reasonable entertainment expenses, subject to such

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reasonable  documentation  and other  limitations  as may be  established by the
Board of Directors of the Savings  Bank.  If such expenses are paid in the first
instance  by the  Executive,  the Savings  Bank shall  reimburse  the  Executive
therefor.

               (g)  Changes in  Benefits.  The  Savings  Bank shall not make any
changes in such plans,  benefits or privileges  previously  described in Section
3(c),  (d) and (e)  which  would  adversely  affect  the  Executive's  rights or
benefits thereunder,  unless such change occurs pursuant to a program applicable
to all  executive  officers  of the  Savings  Bank  and  does  not  result  in a
proportionately  greater  adverse  change in the rights of, or benefits  to, the
Executive  as compared  with any other  executive  officer of the Savings  Bank.
Nothing paid to Executive  under any plan or arrangement  presently in effect or
made available in the future shall be deemed to be in lieu of the salary payable
to Executive pursuant to Section 3(a) hereof.


         4.    Loyalty; Noncompetition.

               (a) The Executive shall devote his full time and attention to the
performance  of his  employment  under  this  Agreement.  During the term of the
Executive's  employment under this Agreement,  the Executive shall not engage in
any business or activity  contrary to the  business  affairs or interests of the
Savings Bank or Parent.

               (b)  Nothing  contained  in this  Section  4 shall be  deemed  to
prevent or limit the right of Executive to invest in the capital  stock or other
securities of any business  dissimilar  from that of the Savings Bank or Parent,
or, solely as a passive or minority investor, in any business.

         5. Standards.  During the term of this  Agreement,  the Executive shall
perform his duties in  accordance  with such  reasonable  standards  expected of
executives with comparable  positions in comparable  organizations and as may be
established from time to time by the Board of Directors.

         6.  Termination and Termination  Pay. The Executive's  employment under
this Agreement shall be terminated upon any of the following occurrences:

               (a) The death of the Executive during the term of this Agreement,
in  which  event  the  Executive's  estate  shall be  entitled  to  receive  the
compensation  due the  Executive  through the last day of the calendar  month in
which Executive's death shall have occurred.

               (b)  The  Board  of  Directors  may  terminate  the   Executive's
employment at any time, but any termination by the Board of Directors other than
termination  for Just  Cause,  shall  not  prejudice  the  Executive's  right to
compensation or other benefits under the Agreement.  The Executive shall have no
right to receive compensation or other benefits for any period after termination
for Just Cause. The Board may within its sole discretion,  acting in good faith,
terminate  the  Executive  for  Just  Cause  and  shall  notify  such  Executive
accordingly. Termination

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for "Just Cause" shall include termination  because of the Executive's  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 the Agreement.

               (c) Except as provided pursuant to Section 9 hereof, in the event
Executive's  employment  under  this  Agreement  is  terminated  by the Board of
Directors without Just Cause, the Savings Bank shall be obligated to continue to
pay the Executive the salary provided pursuant to Section 3(a) herein, up to the
date of termination of the remaining Term of this Agreement, but in no event for
a period of less than twelve  months,  and the cost of Executive  obtaining  all
health,  life,  disability,  and other  benefits  which the  Executive  would be
eligible  to  participate  in through  such date based upon the  benefit  levels
substantially equal to those being provided Executive at the date of termination
of employment.

               (d) The voluntary termination by the Executive during the term of
this  Agreement  with the delivery of no less than 60 days written notice to the
Board of  Directors,  other than  pursuant  to Section  9(b),  in which case the
Executive shall be entitled to receive only the compensation, vested rights, and
all employee benefits up to the date of such termination.

         7.    Regulatory Exclusions.

         (a) If the Executive is suspended  and/or  temporarily  prohibited from
participating  in the conduct of the Savings  Bank's  affairs by a notice served
under Section  8(e)(3) or (g)(1) of the FDIA (12 U.S.C.  1818(e)(3) and (g)(1)),
the Savings Bank's  obligations under the Agreement shall be suspended as of the
date of service, unless stayed by appropriate proceedings. If the charges in the
notice are  dismissed,  the Savings Bank may within its  discretion  (i) pay the
Executive  all  or  part  of  the  compensation   withheld  while  its  contract
obligations were suspended and (ii) reinstate any of its obligations  which were
suspended.

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

         (c) If the Savings Bank is in default (as defined in Section 3(x)(1) of
FDIA) 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.

         (d) All obligations under this Agreement shall be terminated, except to
the extent  determined that  continuation of this Agreement is necessary for the
continued  operation of the Savings  Bank:  (i) by the Director of the Office of
Thrift Supervision ("Director of OTS"), or his

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or her  designee,  at the time that the Federal  Deposit  Insurance  Corporation
("FDIC")  enters into an agreement to provide  assistance to or on behalf of the
Savings Bank under the authority  contained in Section 13(c) of FDIA; or (ii) by
the Director of the OTS, or his or her  designee,  at the time that the Director
of the OTS,  or his or her  designee  approves a  supervisory  merger to resolve
problems  related to  operation  of the Savings Bank or when the Savings Bank is
determined  by the Director of the OTS 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.

         (e) Notwithstanding  anything herein to the contrary, any payments made
to the Executive  pursuant to the Agreement,  or otherwise,  shall be subject to
and  conditioned  upon  compliance  with 12 USC ss.1828(k)  and any  regulations
promulgated thereunder.

         8. Disability.  If the Executive shall become disabled or incapacitated
to the extent  that he is unable to perform his duties  hereunder,  by reason of
medically determinable physical or mental impairment,  as determined by a doctor
engaged by the Board of Directors,  Executive shall receive the compensation and
benefits  provided  under the  provisions  of disability  insurance  coverage in
effect  for  Savings  Bank  employees.   Upon  returning  to  active   full-time
employment,  the  Executive's  full  compensation as set forth in this Agreement
shall be reinstated as of the date of  commencement of such  activities.  In the
event that the Executive  returns to active employment on other than a full-time
basis,  then his  compensation  (as set forth in Section 3(a) of this Agreement)
shall be reduced in proportion to the time spent in said employment, or as shall
otherwise be agreed to by the parties.

         9.    Change in Control.

               (a) Notwithstanding any provision herein to the contrary,  in the
event of the involuntary  termination of Executive's  employment during the term
of this Agreement following any Change in Control of the Savings Bank or Parent,
or within 24 months  thereafter  of such Change in  Control,  absent Just Cause,
Executive  shall be paid an  amount  equal to the  product  of 2.999  times  the
Executive's  "base  amount" as defined in  Section  280G(b)(3)  of the  Internal
Revenue  Code of 1986,  as amended  (the  "Code")  and  regulations  promulgated
thereunder.  Said sum shall be paid, at the option of  Executive,  either in one
(1) lump sum  within  thirty  (30) days of such  termination  of  service  or in
periodic  payments  over  the  next  36  months  or the  remaining  term of this
Agreement,  whichever  is  less,  as if  Executive's  employment  had  not  been
terminated,  and such  payments  shall be in lieu of any other  future  payments
which the  Executive  would be otherwise  entitled to receive under Section 6 of
this Agreement.  Notwithstanding the forgoing,  all sums payable hereunder shall
be  reduced  in such  manner and to such  extent so that no such  payments  made
hereunder when aggregated with all other payments to be made to the Executive by
the Savings Bank or the Parent shall be deemed an "excess parachute  payment" in
accordance  with  Section  280G of the Code and be  subject  to the  excise  tax
provided at Section  4999(a) of the Code.  The term  "Change in  Control"  shall
refer  to (i) the sale of all,  or a  material  portion,  of the  assets  of the
Savings Bank or the Parent;  (ii) the merger or  recapitalization of the Savings
Bank or the Parent  whereby the Savings Bank or the Parent is not the  surviving
entity; (iii) a change

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in control of the Savings Bank or the Parent, 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 Savings Bank
or the Parent by any person,  trust, entity or group. The term "person" means an
individual  other than the  Executive,  or a  corporation,  partnership,  trust,
association, joint venture, pool, syndicate, sole proprietorship, unincorporated
organization or any other form of entity not specifically listed herein.

               (b)  Notwithstanding any other provision of this Agreement to the
contrary,  Executive may voluntarily terminate his employment during the term of
this Agreement  following a Change in Control of the Savings Bank or Parent,  or
within twenty-four months following such Change in Control,  and Executive shall
thereupon  be entitled to receive the payment  described in Section 9(a) of this
Agreement,  upon the occurrence,  or within 120 days  thereafter,  of any of the
following  events,  which have not been consented to in advance by the Executive
in writing: (i) if Executive would be required to move his personal residence or
perform his principal  executive  functions  more than fifty (50) miles from the
Executive's  primary  office as of the  signing of this  Agreement;  (ii) if the
Savings Bank should fail to maintain  Executive's base compensation in effect as
of the date of the Change in Control and the existing  employee  benefits plans,
including material fringe benefit, stock option and retirement plans, except for
changes  impacting  all  employees  generally;  or (iii) if  Executive  would be
assigned duties and  responsibilities  inconsistent  with his level of skill and
experience.

        10.  Withholding.  All payments  required to be made by the Savings Bank
hereunder to the Executive  shall be subject to the withholding of such amounts,
if any,  relating to tax and other  payroll  deductions  as the Savings Bank may
reasonably  determine  should be  withheld  pursuant  to any  applicable  law or
regulation.

        11.    Successors and Assigns.

               (a) This  Agreement  shall inure to the benefit of and be binding
upon any corporate or other  successor of the Savings Bank or Parent which shall
acquire,  directly  or  indirectly,  by  merger,   consolidation,   purchase  or
otherwise,  all or substantially  all of the assets or stock of the Savings Bank
or Parent.

               (b) Since the  Savings  Bank is  contracting  for the  unique and
personal  skills  of the  Executive,  the  Executive  shall  be  precluded  from
assigning or delegating his rights or duties  hereunder  without first obtaining
the written consent of the Savings Bank.

        12. Amendment;  Waiver. 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 such  officer or  officers as may be
specifically designated by the Board of Directors of the Savings Bank to sign on
its behalf. No waiver by any party hereto at any time of any breach

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by any other party hereto of, or 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  provisions  or conditions at the same or at any prior or
subsequent time.

        13.  Governing  Law.  The  validity,  interpretation,  construction  and
performance of this Agreement shall be governed by the laws of the United States
where  applicable and otherwise by the substantive  laws of the  Commonwealth of
Virginia.

        14.  Nature of  Obligations.  Nothing  contained  herein shall create or
require  the  Savings  Bank to  create a trust of any kind to fund any  benefits
which may be payable hereunder,  and to the extent that the Executive acquires a
right to receive  benefits from the Savings Bank hereunder,  such right shall be
no greater than the right of any unsecured general creditor of the Savings Bank.

        15. Headings.  The section headings  contained in this Agreement are for
reference  purposes  only  and  shall  not  affect  in any  way the  meaning  or
interpretation of this Agreement.

        16.  Severability.  The  provisions  of this  Agreement  shall be deemed
severable  and the  invalidity  or  unenforceability  of any  provision  of this
Agreement  shall  not  affect  the  validity  or  enforceability  of  the  other
provisions of this Agreement, which shall remain in full force and effect.

        17. Arbitration.  Any controversy or claim arising out of or relating to
this  Agreement,  or the breach  thereof,  shall be settled  by  arbitration  in
accordance  with the rules then in effect of the district office of the American
Arbitration  Association ("AAA") nearest to the home office of the Savings Bank,
and  judgment  upon the  award  rendered  may be  entered  in any  court  having
jurisdiction thereof,  except to the extent that the parties may otherwise reach
a mutual settlement of such issue.  Further, the settlement of the dispute to be
approved  by the  Board of the  Savings  Bank may  include a  provision  for the
reimbursement  by the Savings Bank to the Executive for all reasonable costs and
expenses,  including  reasonable  attorneys'  fees,  arising from such  dispute,
proceedings  or  actions,  or the Board of the  Savings  Bank or the  Parent may
authorize such  reimbursement  of such reasonable costs and expenses by separate
action upon a written action and determination of the Board following settlement
of the  dispute.  Such  reimbursement  shall be paid  within  ten  (10)  days of
Executive furnishing to the Savings Bank or Parent evidence, which may be in the
form,  among  other  things,  of a canceled  check or  receipt,  of any costs or
expenses incurred by Executive.

        18. Confidential Information. The Executive acknowledges that during his
or her  employment  he or  she  will  learn  and  have  access  to  confidential
information  regarding  the Savings  Bank and the Parent and its  customers  and
businesses ("Confidential Information").  The Executive agrees and covenants not
to  disclose  or use for his or her own  benefit,  or the  benefit  of any other
person or entity, any such Confidential Information, unless or until the Savings
Bank or the  Parent  consents  to  such  disclosure  or use or such  information
becomes common  knowledge in the industry or is otherwise  legally in the public
domain. The Executive shall not knowingly disclose or reveal to any unauthorized
person any Confidential Information relating to the Savings

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Bank, the Parent, or any subsidiaries or affiliates, or to any of the businesses
operated by them, and the Executive  confirms that such information  constitutes
the exclusive  property of the Savings Bank and the Parent.  The Executive shall
not otherwise  knowingly act or conduct himself (a) to the material detriment of
the Savings Bank or the Parent, or its subsidiaries,  or affiliates, or (b) in a
manner which is inimical or contrary to the interests of the Savings Bank or the
Parent.  Executive  acknowledges and agrees that the existence of this Agreement
and its terms and conditions constitutes Confidential Information of the Savings
Bank,  and the  Executive  agrees not to disclose the  Agreement or its contents
without the prior  written  consent of the  Savings  Bank.  Notwithstanding  the
foregoing,  the Savings Bank  reserves the right in its sole  discretion to make
disclosure of this Agreement as it deems  necessary or appropriate in compliance
with its regulatory reporting requirements.  Notwithstanding  anything herein to
the  contrary,  failure by the  Executive to comply with the  provisions of this
Section may result in the immediate termination of the Agreement within the sole
discretion of the Savings Bank,  disciplinary action against the Executive taken
by the Savings Bank,  including but not limited to the termination of employment
of the Executive for breach of the Agreement and the provisions of this Section,
and other remedies that may be available in law or in equity.

        19. Entire Agreement.  This Agreement together with any understanding or
modifications  thereof as agreed to in writing by the parties,  shall constitute
the entire agreement between the parties hereto.



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