EXHIBIT 10.4


                              EMPLOYMENT AGREEMENT


     THIS  AGREEMENT,  entered  into as of the 1st day of  April,  1997,  by and
between COMMUNITY BANK, a federally chartered savings bank, (the "Corporation"),
and THOMAS W. WINFREE(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 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  President
and Chief Executive  Officer 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:

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     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,  which
period of  employment  may be  extended  or  terminated  only upon the terms and
conditions hereinafter set forth.

     2. ANNUAL REVIEWS-EXTENTIONS OF TERM:

     The  Corporation's  fiscal  year  begins  on April 1 and ends on March  31.
Within  thirty days after the end of each fiscal year,  beginning  with the year
that ends March 31, 1997, the Board of Directors of the Corporation shall review
the Executive's  performance for the immediately  preceding  fiscal year.  After
each such review,  this Agreement may be extended for successive terms of twelve
(12) months each by an appropriate  written instrument executed by the Executive
and on behalf of the Corporation. Any decision by the Corporation to extend this
Agreement  shall not bind the  Corporation  unless such decision is reviewed and
approved by the Board of Directors of the Corporation.  If this Agreement is not
extended  in  writing  before  the end of its term (as such  term may have  been
extended) nor expressly terminated,  it shall automatically terminate at the end
of its term (as such term may have been extended).

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

     4.  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 One Hundred Fifteen Thousand Dollars ($115,000.00),
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

  
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to pay bonuses to the Executive from time to time.

     5.  PARTICIPATION IN BENEFIT PLANS,  REIMBURSEMENT OF BUSINESS EXPENSES AND
OTHER  BENEFITS:  (i)  During  the  term of  employment  under  this  Agreement,
Executive  shall be entitled 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.

     (iii) The  Corporation  shall  provide an  automobile  for the  Executive's
personal and business use (for which  Executive  will pay $100.00 per month) and
pay the Executive's dues for membership at the Staunton Country Club.

     6.  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.

     7. DEATH: In the event of Executive's death during the

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term of this  Agreement,  this  Agreement  shall  terminate as of the end of the
month in which Executive dies. This Section 7 shall not affect the rights of any
person under other contract  between the Executive and either the Corporation or
CFC or under any life insurance policy.

     8. 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 the remainder of the then current
     term of this Agreement,  at such times as payment was theretofore made, the
     salary required under Section 4 that the Executive would have been entitled
     to receive  during the remainder of the then current term of this Agreement
     had such termination not occurred; and

          (ii) The  Corporation  shall maintain in full force and effect for the
     continued  benefit of the  Executive  for the remainder of the then current
     term  of this  Agreement,  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

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     express written consent;

          (ii) The removal of the Executive  from or any failure to re-elect him
     to  the  position  of  President  and  Chief   Executive   Officer  of  the
     Corporation,  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 One Hundred Fifteen Thousand Dollars ($115,000.00) 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

          (v) The failure of the  Corporation  to obtain the  assumption  of and
     agreement to perform this  Agreement by any  successor as  contemplated  in
     Section 11(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 18, the Corporation  shall continue to pay the Executive his full salary
and benefits as  described in Sections 4 and 5, 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.

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     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 8(a) hereof.

     (e) If the Executive's  employment terminates after a Change of Control (as
defined in Section 10 hereof),  the payments to which he is entitled pursuant to
Section  10 shall be in lieu of any  payment  to  which  he might  otherwise  be
entitled under the terms of Section 8(a)(i). The benefits to which the Executive
is  entitled  under  Section  8(a)(ii)  shall  be  payable  whether  or not  his
employment terminates after a Change of Control.

     9. 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.

     (b) Termination of the Executive's  employment by the Corporation for Cause
pursuant to Section 9(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

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requesting arbitration pursuant to Section 18, the Corporation shall continue to
pay the Executive his full salary and benefits as described in Sections 4 and 5,
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 9(b),  plus the cost to the  Corporation  of
providing the Executive such fringe  benefits from the date of such  termination
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 9(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 8(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 8 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 9(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

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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 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 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.

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     10. CHANGE OF CONTROL:

     (a) If the Executive's  employment terminates for any reason other than for
Cause during the term of this  Agreement and any renewal term following a Change
of Control of CFC, on or before the Executive's  last day of employment with the
Corporation  (in  addition  to all  other  payments  and  benefits  to which the
Executive is entitled under any other contract) the Corporation shall pay to the
Executive as compensation for services  rendered to it a cash amount (subject to
any  applicable  payroll or other taxes  required to be withheld)  equal to 2.99
times the  Executive's  salary and bonus received  during the twelve (12) months
ending with the termination of the Executive's employment, provided that, at the
option of the  Executive,  the cash amount  required to be paid hereby  shall be
paid by the Corporation in equal monthly  installments  over the thirty-six (36)
months succeeding the date of termination, payable on the first day of each such
month.

     (b) 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 April 1,  1997 and any
individual  who becomes a director of CFC subsequent to April 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

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surviving  entity or a parent or affiliate  therof) at least fifty percent (50%)
of the outstanding  common stock of CFC or such surviving  entity or a parent or
affiliate therof  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.

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     11. 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. All amounts payable by the
Corporation  hereunder  shall  be paid  without  notice  or  demand.  Except  as
expressly  provided  in  Sections  8(d) and 9(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  8(a) shall be
reduced  dollar for dollar by the cash  compensation  received by the  Executive
from such other  employment.  This  Section  11(b) shall not be  interpreted  to
require  or permit any  reduction  of  benefits  to which the  Executive  may be
entitled under Section 10.

     (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 8(a) or Section 10, as appropriate.  As
used in this Agreement,  "Corporation" shall mean Community Federal Savings Bank
and any successor to its

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business  and/or assets as aforesaid  which  executes and delivers the agreement
provided for in this Section 11(c) or which  otherwise  becomes bound by all the
terms and provisions of this Agreement by operation of law.

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

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     13.  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:    Thomas W. Winfree
                             #6 Waverly Green
                             Staunton, VA 24401

     If to the Corporation:  Community Federal Savings 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.

     14.  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  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.

     15. 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 of such prohibition or

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<PAGE>

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.

     16. 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.

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


     18.  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  11(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.

     19. 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 of this  Agreement,
"confidential

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<PAGE>

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  information,   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.

     (b)  Subject  to  Section  19(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  covenant  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 this  Agreement  terminates  pursuant to Section 9(d), the covenant set
forth in Section 19(b) shall not apply.

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<PAGE>

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

                                                  "EXECUTIVE"



ATTEST: ____________________             /s/  Thomas W. Winfree
                                         -------------------------------
                                                Thomas W. Winfree


                                          COMMUNITY BANK ("CORPORATION")



ATTEST: ____________________          By:
                                          ------------------------------
                                                AUTHORIZED OFFICER

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