THIS AGREEMENT is entered into as of the 29th day of September, 2000 (the "Effective
Date") by and between COMMUNITY BANK (the "Corporation"), a federally chartered savings
bank, and P. DOUGLAS RICHARD (the "Executive").

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 the Executive on the terms and
conditions set forth herein and, for the purpose of effecting the same, the Board of Directors of the
Corporation has approved this Agreement and authorized its execution and delivery on the
Corporation's behalf to the Executive;

WHEREAS, the Executive is presently the duly elected President and Chief Executive
Officer of the Corporation and CFC, and as such is a key executive officer of the Corporation and
CFC whose continued dedication, availability, advice and counsel to the Corporation and CFC is
deemed important to the Boards of Directors of the Corporation and CFC, as well as the Corporation,
CFC and their respective stockholder(s);

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
CFC;

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, CFC and their respective stockholder(s).

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

1.  EMPLOYMENT:  The Corporation agrees to, and does hereby, employ the
Executive, and the Executive agrees to, and does hereby, accept such employment, for the period
beginning on the Effective Date and ending two years thereafter.

2.  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.  As such, the Executive shall render administrative and
management services as are customarily performed by persons situated in similar executive
capacities, and shall have such other powers and duties as the Board of Directors of the Corporation
may prescribe from time to time.  The Executive shall also render services to CFC and to any
subsidiary or subsidiaries of CFC or the Corporation as requested by the Board of Directors of the
Corporation from time to time consistent with his executive position.  The Executive may (i) serve
on corporate or charitable boards or committees and (ii) manage personal investments, so long as
such activities do not interfere materially with the performance of his responsibilities hereunder.

3.  COMPENSATION; VACATION:

(a)       	The Corporation agrees to pay the Executive, and the 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 Twenty-Five
Thousand and no/100 Dollars ($125,000.00), which shall be payable in monthly, semi-monthly or
bi-weekly installments in conformity with the 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 a committee thereof duly authorized by the Board of Directors to so act.  The Board of
Directors, in its discretion, may cause the Corporation to pay bonuses to the Executive from time
to time.

(b)       The Executive shall be entitled to annual paid vacation in accordance with the policies
established by the Board of Directors of the Corporation for executive officers, which shall be in no
event less than three (3) weeks per year, and to voluntary leaves of absence, with or without pay,
from time to time at such times and upon such conditions as the Board of Directors may determine
in its discretion.

4.  PARTICIPATION IN BENEFIT PLANS, REIMBURSEMENT OF BUSINESS
EXPENSES AND OTHER BENEFITS:

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

(b)       During the term of the Executive's employment under this Agreement, the
Corporation shall pay (i) to the Executive a monthly car allowance of not less than Five Hundred and
no/100 Dollars ($500.00), which allowance shall be payable to the Executive monthly and may be
increased in the discretion of the

Board of Directors of the Corporation or a committee thereof duly authorized by the Board of Directors to so act and (ii) to the Country Club of Stanton, all dues and
assessments (monthly or otherwise) associated with the Executive's membership in such country
club.

(c)       During the term of the Executive's employment under 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 costs, including
monthly dues and assessments, of maintaining memberships at appropriate clubs and organizations)
made in accordance with rules and policies established from time to time by the Board of Directors
of the Corporation in pursuance and furtherance of the Corporation's business and good will.

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

6.  DEATH:  In the event of the Executive's death during the term of this Agreement,
this Agreement shall terminate as of the end of the month in which the Executive dies.  This Section
6 shall not affect the rights of any party under other contract between the Executive and either the
Corporation or CFC or under any life insurance policy.

7.  TERMINATION WITHOUT CAUSE/RESIGNATION FOR GOOD REASON:

(a)       Notwithstanding the provisions of Section 1 of this Agreement, 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 ("Notice of Termination"), which notice shall indicate the
specific provision(s) in this Agreement relied upon for such termination.  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 ("Notice of Resignation"), which notice 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.  In the event the
Corporation terminates the Executive's employment without Cause or the Executive resigns for
Good Reason, and, in either such event, the Executive offers in writing to continue to provide the
services contemplated by and on the terms of this Agreement and such offer is not accepted by the
Corporation unconditionally in writing within five (5) days thereafter, then the Executive shall be
entitled to liquidated damages, subject in the case the Executive's resignation for Good Reason to
the provisions of Section 7(d) of this Agreement, as follows:

(i)       The Executive shall be paid a lump sum cash payment by the Corporation,
within thirty-five (35) days after a Notice of Termination is given by the Corporation to the
Executive  pursuant to this Section 7(a) of the Agreement, in an amount equal to the greater of (A)
1.5 times the total cash compensation (including bonus) paid or payable to the Executive during the
twelve (12) full consecutive months immediately preceding the effective date of the Executive's
termination of employment or (B) the salary due to the Executive for the remaining term of this
Agreement under Section 3(a) (without any present value adjustment) that the Executive would have
been entitled to receive had such termination not occurred; and

(ii)       The Corporation shall maintain in full force and effect for the continued
benefit of the Executive for twelve (12) months following the effective date of the Executive's
termination or resignation (the "Liquidated Damage Period"), as the case may be, at no cost to the
Executive, all employee benefit plans and programs or arrangements in which the Executive was
entitled to participate immediately prior to such termination as described in Sections 4(a) and 4(b)
of this Agreement (other than stock-based compensation plans of the Corporation or CFC), provided
that continued participation is possible under the general terms and provisions of such plans and
programs.  In the event that the 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)       (i)        In the event that the Executive becomes entitled to liquidated damages
pursuant to Section 7(a) above, (A) the Corporation's obligations under Section 7(a)(i) above with
respect to cash damages shall be reduced by the amount of the Executive's cash income, if any,
earned from providing personal services during the Liquidated Damage Period; and (B) the
Corporation's obligation to maintain the benefits described under Section 7(a)(ii) above shall be
reduced to the extent, if any, that the Executive receives such benefits, on no less favorable terms,
from another employer during the Liquidated Damage Period.  For purposes of this Section 7(b), the
term "cash income" shall include amounts of salary, wages, bonuses, incentive compensation and
fees paid to the Executive in cash but shall not include shares of stock, stock options, stock
appreciation rights or other earned income not paid to the Executive in cash.  To the extent the
provisions of this Section 7(b) are applicable and an overpayment has been made to the Executive
as of the expiration of the Liquidated Damage Period, the Executive shall reimburse the Corporation
in an amount equal to the after tax benefit realized by the Executive from such overpayment (*i.e.*
amount realized net of all federal, state, local, employment and medicare taxes).  In making the
reimbursement calculation it shall be presumed that the Executive is subject to the highest marginal
federal and state income tax rates.  This Section 7(b) shall not be interpreted to require or permit any
reduction of benefits to which the Executive may be entitled under Section 9.

(ii)       The Executive agrees that in the event he becomes entitled to liquidated
damages pursuant to Section 7(a) above, throughout the Liquidated Damage Period, he shall
promptly inform the Corporation of the nature and amounts of cash income and the type of health
benefits and coverage which he earns or receives from providing personal services, and shall provide
such documentation of such cash income and such health benefits and coverage as the Corporation
may request.  In the event of changes to such cash income or such health benefits or coverage from
time to time, the Executive shall inform the Corporation of such changes, in

each case within five days after the change occurs, and shall provide such documentation concerning the change as the
Corporation may request.

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

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

(ii)       The removal of the Executive from or any failure to re-elect him to the
positions of President and Chief Executive Officer, 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 Twenty-Five Thousand and no/100 Dollars ($125,000.00) 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 10(c) of this Agreement;

(d)       If within thirty (30) days after any Notice of Resignation is given the Corporation
notifies the Executive that a dispute exists concerning the resignation for Good Reason and that it
is requesting arbitration pursuant to Section 17, the Corporation shall continue to pay the Executive
his full salary and benefits as described in Sections 3 and 4, as and when due and payable, at least
until such time as a final decision is reached by the arbitrator(s).  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 and termination of service by the Executive to the
date of the resolution of such dispute shall be repaid within ten (10) days after the ultimate resolution
of such dispute 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.  In the
event it is ultimately determined that resignation by the Executive for Good Reason pursuant Section
7(c) was justified, then the Executive shall be entitled to receive as liquidated damages, within ten
(10) days of the ultimate resolution of such dispute, the payments and other benefits provided for
in Section 7(a) with interest from the date such payments and benefits were first due to the Executive
until paid by the Corporation at the rate charged from time to time by the Corporation to its most
substantial customers for unsecured extensions of credit, subject to reduction for any amounts paid
to or on behalf of the Executive by the Corporation pursuant to the first sentence of this Section 7(d).

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

(e)       If the Executive's employment terminates as a result of or in connection with a
Change of Control as described in Section 9 of this Agreement, the payments to which the Executive
is entitled pursuant to Section 9 shall be in lieu of any payments to which he might otherwise be
entitled under the terms of Section 7(a)(i).

8.  RESIGNATION - TERMINATION FOR CAUSE - REGULATORY
TERMINATION:

(a)       Notwithstanding the provisions of Section 1 of this Agreement, the Board of
Directors of the Corporation may, in its sole discretion, terminate the Executive's employment for
Cause.  For the purposes of this Agreement, "Cause" shall mean personal dishonesty, 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 failure to act by the Executive shall be considered willful unless the Executive
acted or failed to act with an absence of good faith and without a reasonable belief that his action or
failure to act was in the best interest of the Corporation.  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 8(a) shall be communicated by written Notice of Termination to the Executive.  A Notice
of Termination pursuant to this Section 8(a) shall indicate the specific termination provision(s) in
this Agreement relied upon and shall set forth with particularity the facts and circumstances claimed
to provide a basis for termination of employment for Cause under the provision so indicated.

If within ninety (90) days after any Notice of Termination is given the Executive notifies the
Corporation that a dispute exists concerning the termination for Cause and that he is requesting
arbitration pursuant to Section 17, the Corporation shall continue to pay the Executive his full salary
and benefits as described in Sections 3 and 4, as and when due and payable, at least until such time
as a final decision is reached by the panel of arbitrators.  If a termination for Cause by the
Corporation is challenged by the Executive and the termination is ultimately determined to be
justified, then all sums paid by the Corporation to the Executive pursuant to this Section 8(b), plus
the cost to the Corporation of providing the Executive such fringe benefits from the date of such
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 to Section 8(a) was not justified, then the Executive shall
be entitled to
retain all sums paid to him pending the resolution of such dispute and he shall be
entitled to receive the full payments and other benefits provided for in Section 7(a) as liquidated
damages, provided the Executive offers in writing to continue to provide the services contemplated
by and on the terms of this Agreement and such offer is not accepted by the Corporation
unconditionally in writing within five (5) days thereafter.

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

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

(d)       If the 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.
§§ 1818(e)(3) and 1818(g)(1)] of the Federal Deposit Insurance Act, 12 U.S.C. § 1811 et seq. (the
"Federal Deposit Insurance Act"), the Corporation's obligations under this Agreement shall be
suspended as of the date of service unless stayed by appropriate proceedings.  If the charges in the
notice are dismissed, the Corporation may in its discretion (i) pay the 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 the 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. §§ 1818(e)(4) or 1818(g)(1)], all obligations of the Corporation
under this Agreement shall terminate as of the effective date of the order, but vested rights of the
contracting parties shall not be affected.

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

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

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

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

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

9.  CHANGE OF CONTROL: If the Executive's employment by the Corporation shall
be terminated by the Corporation, other than for Cause or as a result of the Executive's death,
disability or retirement, or terminated by the Executive for Good Reason, in either case within six
(6) months preceding or twelve (12) months following a Change in Control of CFC or the
Corporation, then the Corporation, in lieu of the Corporation's obligations under Section 7(a)(i) of
this Agreement, shall:

(a)  Pay to the Executive in cash (less any amounts previously paid to the Executive
pursuant to Section 7(a) of this Agreement following the Executive's termination or resignation of
employment), upon the later of the date of such Change in Control or the effective date of the
Executive's termination of employment with the Corporation, an amount equal to 299% of the
Employee's "base amount" as determined under Section 280G of the Internal Revenue Code of 1986,
as amended (the "Code"); and

(b)       Maintain and provide for a period ending at the earlier of (i) one (1) year after the
effective date of the Executive's termination or (ii) the date of the Executive's full time employment
by another employer, at no cost to the Executive, the Corporation's obligations under Section 7(a)(ii)
of this Agreement.

(c)       For purposes of this Agreement, a Change of Control of CFC occurs in any of the
following events: (i) the acquisition by any "person" or "group" (as defined in Sections 13(d) and
14(d) of the Securities Exchange Act of 1934 ("Exchange Act")), other than CFC, any subsidiary of
CFC or their employee benefit plans, 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 the Effective
Date and any individual who becomes a director of CFC subsequent to the Effective Date and who
is elected or nominated by or at the direction of at least two-thirds of the then incumbent directors;
(iii) the shareholders of CFC approve (x) a merger, consolidation or other business combination of
CFC with any other "person" or "group" (as defined in Sections 13(d) and 14(d) of the Exchange
Act) or affiliate thereof, other than a merger or consolidation that would result in the outstanding
common stock of CFC immediately prior thereto continuing to represent (either by remaining
outstanding or by being converted into common stock of the surviving entity or a parent or affiliate
thereof) at least fifty percent (50%) of the outstanding common stock of CFC or such surviving
entity or a parent or affiliate thereof outstanding immediately after such merger, consolidation or
other business combination, or (y) a plan of complete liquidation of CFC or an agreement for the sale
or disposition by CFC of all or substantially all of CFC's assets; or (iv) any other event or
circumstance which is not covered by the foregoing subsections but which the Board of Directors
of CFC determines to affect control of CFC and with respect to which the Board of Directors adopts
a resolution that the event or circumstance constitutes a Change of Control for purposes of the
Agreement.

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

10.  LITIGATION - OBLIGATIONS - SUCCESSORS:

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

(b)       The Corporation's obligation to pay the Executive the compensation and benefits and
to make the arrangements provided herein shall be absolute and unconditional and shall not be
affected by any circumstances, including, without limitation, any set-off, counterclaim, recoupment,
defense or other right which the Corporation may have against him or anyone else.  All amounts
payable by the Corporation hereunder shall be paid without notice or demand.  Except as expressly
provided in Sections 7(b), 7(d) and 8(b), each and every payment made hereunder by the Corporation
shall be final and the Corporation will not seek to recover all or any part of such payment from the
Executive or from whosoever may be entitled thereto, for any reason whatsoever.  The Executive
shall not be required to mitigate the amount of any payment provided for in this Agreement by
seeking other employment or otherwise.  This Section 10(b) shall not be interpreted to require or
permit any reduction of benefits to which the Executive may be entitled under Section 9.

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

11.  LIMITATION OF BENEFITS:	It is the intention of the parties that no payment be made or benefit provided to the Executive that would constitute an "excess parachute
payment" within the meaning of Section 280G of the 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 the 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.

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

| | If to the Executive:   |  | P. Douglas RichardP.O. Box 904Staunton, VA 24402-1209                  
| | ---------------------- |  | -----------------------------------------------------------------------
| | If to the Corporation: |  | Community Bank38 N. Central AvenueP. O. Box 1209Staunton, VA 24402-1209

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

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

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

15.  SUCCESSOR RIGHTS:  This Agreement shall inure to the benefit of and be
enforceable by the Executive's personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees.  If the 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.

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

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

18.  CONFIDENTIALITY - NONSOLICITATION:

(a)       The Executive acknowledges that the Corporation may disclose certain confidential
information to the Executive during the term of this Agreement to enable him to perform his duties
hereunder.  The Executive hereby covenants and agrees that he will not, without the prior written
consent of the Corporation, during the term of this Agreement or at any time thereafter, disclose or
permit to be disclosed to any third party by any method whatsoever any of the confidential
information of the Corporation.  For purposes of this Agreement, "confidential information" shall
include, but not be limited to, any and all records, notes, memoranda, data, ideas, processes,
methods, techniques, systems, formulas, patents, models, devices, programs, computer software,
writings, research, personnel information, customer 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 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 18(c), during the term of this Agreement and throughout
any further period that he is an officer or employee of the Corporation, and for a period of twelve
(12) months from and after the termination of the last such position held by the Executive, or for a
period of twelve (12) months from the date of entry by a court of competent jurisdiction of a final
judgment enforcing this covenant in the event of a breach by the Executive, whichever is later, the
Executive covenants and agrees that he will not, without the prior written consent of the Corporation,
solicit any existing or former customer or employee of the Corporation for any competing business
regardless of its location.

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

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

|                                |  | EXECUTIVE                                    
|------------------------------- |  | ---------------------------------------------
|ATTEST:  /s/ Martha B. Chandler |  | /s/ P. Douglas Richard     P.
Douglas Richard
|                                |  | COMMUNITY BANK                               
|ATTEST:  /s/ Martha B. Chandler |  | By: /s/ James R. Cooke, Jr.