EXHIBIT 10


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                              EMPLOYMENT AGREEMENT


      THIS  AGREEMENT  entered  into  this  15th day of July,  1997  ("Effective
Date"),  by and between Advance  Financial Savings Bank (the "Savings Bank") and
Stephen M. Gagliardi (the "Employee").

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

      WHEREAS,  the parties  desire by this writing to set forth the  continuing
employment relationship of the Savings Bank and the Employee.

      NOW, THEREFORE, it is AGREED as follows:

      1.  Employment.  The Employee is employed in the capacity as the President
and Chief Executive  Officer of the Savings Bank. The Employee shall render such
administrative and management services to the Savings Bank and Advance Financial
Bancorp ("Parent") as are currently rendered and as are customarily performed by
persons situated in a similar executive capacity. The Employee shall promote the
business of the Savings Bank and Parent.  The  Employee'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. Base  Compensation.  The Savings Bank agrees to pay the Employee during
the Term of this Agreement (as hereinafter defined at Section 5) a salary at the
rate of at least $98,991.96 per annum,  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 Employee  shall be entitled to
receive  annually  an increase  at such  percentage  or in such an amount as the
Board of Directors in its sole discretion may decide at such time.

      3.  Discretionary  Bonus. The Employee 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  employees  from time to time.  No other
compensation provided for in this Agreement shall be deemed a substitute for the
Employee's  right  to  participate  in such  discretionary  bonuses  when and as
declared by the Board of Directors.

      4. (a)  Participation  in Retirement and Medical Plans. The Employee shall
be entitled to  participate in any plan of the Savings Bank relating to pension,
profit-sharing,   or  other   retirement   benefits  and  medical   coverage  or
reimbursement  plans  that the  Savings  Bank may adopt for the  benefit  of its
employees. Additionally, Employee's dependent family shall be eligible to


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participate in medical and dental  insurance plans sponsored by the Savings Bank
or Parent with the cost of such premiums paid by the Savings Bank.

      (b)  Employee  Benefits;  Expenses.  The  Employee  shall be  eligible  to
participate in any fringe benefits which may be or may become  applicable to the
Savings Bank's senior management employees,  including by example, participation
in any stock  option or  incentive  plans  adopted by the Board of  Directors of
Savings Bank or Parent, reimbursement for club memberships, a reasonable expense
account,  receipt of an appropriate automobile  reimbursement  allowance and any
other benefits which are commensurate with the responsibilities and functions to
be  performed  by the  Employee  under this  Agreement.  The Savings  Bank shall
reimburse  Employee for all  reasonable  out-of-pocket  expenses  which Employee
shall incur in connection with his service for the Savings Bank.

      5. Term. The term of employment of Employee under this Agreement  shall be
for the  period  commencing  on the  Effective  Date and  ending  July 15,  2000
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  one year  period  beyond the then  effective
expiration  date upon a  determination  and resolution of the Board of Directors
that the performance of the Employee has met the  requirements  and standards of
the Board, and that the Term of such Agreement shall be extended.

      6.    Loyalty; Noncompetition.
            -----------------------

      (a)  The  Employee  shall  devote  his  full  time  and  attention  to the
performance  of  his  employment  under  this  Agreement.  During  the  term  of
Employee's employment under this Agreement, the Employee 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 6 shall be deemed to  prevent or
limit the right of Employee 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.

      7.  Standards.  The Employee shall perform his duties under this Agreement
in  accordance  with  such  reasonable  standards  expected  of  employees  with
comparable positions in comparable  organizations and as may be established from
time to time by the Board of Directors.

      8.  Vacation  and Sick  Leave.  At such  reasonable  times as the Board of
Directors  shall in its  discretion  permit,  the  Employee  shall be  entitled,
without loss of pay, to absent himself  voluntarily  from the performance of his
employment under this

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Agreement,  with all such voluntary absences to count as vacation time; provided
that:

      (a) The Employee shall be entitled to annual  vacation leave in accordance
with the policies as are periodically  established by the Board of Directors for
senior management employees of the Savings Bank.

      (b) The Employee shall be entitled to receive any additional  compensation
from the  Savings  Bank on account of his  failure  to take  vacation  leave and
Employee  shall not be entitled to  accumulate  unused  vacation from one fiscal
year to the next, except in either case to the extent authorized by the Board of
Directors for senior management employees of the Savings Bank.

      (c) In addition to the aforesaid  paid  vacations,  the Employee  shall be
entitled without loss of pay, to absent himself voluntarily from the performance
of his employment with the Savings Bank for such additional  periods of time and
for  such  valid  and  legitimate  reasons  as the  Board  of  Directors  in its
discretion may determine.  Further,  the Board of Directors shall be entitled to
grant to the  Employee a leave or leaves of absence  with or without pay at such
time or times and upon such terms and  conditions  as the Board of  Directors in
its discretion may determine.

      (d) In addition,  the  Employee  shall be entitled to an annual sick leave
benefit as established by the Board of Directors for senior management employees
of the Savings  Bank.  In the event that any sick leave  benefit  shall not have
been used during any year,  such leave shall accrue to  subsequent  years to the
extent authorized by the Board of Directors for employees of the Savings Bank.

      9.    Termination and Termination Pay.
            -------------------------------

      The Employee's  employment  under this Agreement  shall be terminated upon
any of the following occurrences:

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

      (b) The Board of Directors may terminate the Employee's  employment at any
time, but any termination by the Board of Directors  other than  termination for
Just Cause,  shall not prejudice the Employee's  right to  compensation or other
benefits  under the  Agreement.  The  Employee  shall  have no right to  receive
compensation or other benefits for any period after  termination for Just Cause.
Termination for "Just Cause" shall include termination because of the Employee's
personal dishonesty, incompetence,

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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  12  herein,  in the event
Employee's  employment  under  this  Agreement  is  terminated  by the  Board of
Directors without Just Cause, the Bank shall be obligated to continue to pay the
Employee  the salary  provided  pursuant to Section 2 herein,  up to the date of
termination  of the Term  (including any renewal term) of this Agreement and the
cost of Employee  obtaining all health,  life,  disability,  and other  benefits
which the Employee  would be eligible to  participate in through such date based
upon the benefit levels  substantially equal to those being provided Employee at
the date of  termination  of employment.  Notwithstanding  the foregoing,  in no
event  shall the  Employee  receive  payment  of his salary in  accordance  with
Section 2 herein and the cost of  applicable  benefits for a period of less than
twelve months from the date of termination of employment without Just Cause.

      (d)  If  the  Employee  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.

      (e) 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.

      (f) 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 designee,  at the time that the
Federal  Deposit  Insurance   Corporation   ("FDIC")  or  the  Resolution  Trust
Corporation  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  designee,  at the time that the Director of
the OTS,  or his  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.


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      (g) The  voluntary  termination  by the  Employee  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 12(b),  in which case the Employee
shall be entitled  to receive  only the  compensation,  vested  rights,  and all
employee benefits up to the date of such termination.

      (h) Notwithstanding  anything herein to the contrary, any payments made to
the Employee  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.

      10.  Suspension  of  Employment  . If the  Employee  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 in its discretion (i) pay the Employee all or part of the  compensation
withheld while its contract obligations were suspended and (ii) reinstate any of
its obligations which were suspended.

      11. Disability.  If the Employee 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,  Employee  shall  nevertheless  continue  to
receive the compensation and benefits provided under the terms of this Agreement
in accordance with the Savings Bank's disability policy as in effect on the date
he becomes disabled. Such benefits noted herein shall be reduced by any benefits
otherwise  provided to the Employee  during such period under the  provisions of
disability insurance coverage in effect for Savings Bank employees.  Thereafter,
Employee  shall be eligible  to receive  benefits  provided by the Savings  Bank
under the provisions of disability insurance coverage in effect for Savings Bank
employees.  Upon returning to active full-time  employment,  the Employee'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 Employee  returns to
active employment on other than a full-time basis, then his compensation (as set
forth in Section 2 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.

      12.   Change in Control.
            -----------------

      (a) Notwithstanding any provision herein to the contrary,  in the event of
the  involuntary  termination of Employee's  employment  during the Term of this
Agreement following any change in control of the Savings Bank or Parent,  absent
Just Cause, Employee shall

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be paid an  amount  equal to the  product  of 2.99  times the  Employee'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  Employee,  either in one (1) lump sum within  thirty
(30) days of such  termination  discounted  to the present value of such payment
using as the  discount  rate the "prime  rate" as  published  in the Wall Street
Journal  Eastern  Edition as of the date of such payment minus 100 basis points,
or in periodic  payments over the next 36 months or the  remaining  term of this
Agreement  whichever  is  less,  as  if  Employee's   employment  had  not  been
terminated,  and such  payments  shall be in lieu of any other  future  payments
which the Employee  would be otherwise  entitled to receive  under  Section 9 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 Employee 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 "control"  shall refer to the
ownership,  holding  or power to vote more than 25% of the  Parent's  or Savings
Bank's voting  stock,  the control of the election of a majority of the Parent's
or Savings Bank's directors, or the exercise of a controlling influence over the
management or policies of the Parent or Savings Bank by any person or by persons
acting as a group within the meaning of Section 13(d) of the Securities Exchange
Act of 1934. The term "person" means an individual other than the Employee, 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,
Employee  may  voluntarily  terminate  his  employment  during  the Term of this
Agreement  following  a change in control  of the  Savings  Bank or Parent,  and
Employee shall thereupon be entitled to receive the payment described in Section
12(a) of this  Agreement,  upon the  occurrence,  or  within  ninety  (90)  days
thereafter,  of any of the following events, which have not been consented to in
advance by the  Employee in writing:  (i) if Employee  would be required to move
his personal  residence or perform his principal  executive  functions more than
thirty-five  (35) miles from the Employee's  primary office as of the signing of
this Agreement;  (ii) if in the organizational  structure of the Savings Bank or
Parent,  Employee  would be required to report to a person or persons other than
the Board of the Savings  Bank or Parent;  (iii) if the  Savings  Bank or Parent
should fail to maintain Employee'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 to the extent
that such  reduction  in benefit  programs is part of an overall  adjustment  in
benefits  for  all  employees  of the  Savings  Bank  or  Parent  and  does  not
disproportionately adversely impact the

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Employee;  (iv) if Employee would be assigned duties and responsibilities  other
than those  normally  associated  with his position as  referenced at Section 1,
herein;  (v) if  Employee  would not be  elected  or  reelected  to the Board of
Directors  of the  Savings  Bank;  or (vi)  if  Employee's  responsibilities  or
authority have in any way been diminished or reduced.

      13.   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  Employee,  the  Employee  shall be  precluded  from  assigning or
delegating his rights or duties  hereunder  without first  obtaining the written
consent of the Savings Bank.

      14.  Amendments.  No  amendments or additions to this  Agreement  shall be
binding  upon the  parties  hereto  unless  made in  writing  and signed by both
parties, except as herein otherwise specifically provided.

      15.  Applicable  Law.  This  agreement  shall be governed by all  respects
whether as to validity, construction, capacity, performance or otherwise, by the
laws of the State of West Virginia,  except to the extent that Federal law shall
be deemed to apply.

      16.  Severability.  The  provisions  of this  Agreement  shall  be  deemed
severable and the  invalidity  or  unenforceability  of any provision  shall not
affect the validity or enforceability of the other provisions hereof.

      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 extend that the parties may otherwise reach
a mutual settlement of such issue. The Savings Bank shall reimburse Employee for
all reasonable costs and expenses, including reasonable attorneys' fees, arising
from such  dispute,  proceedings  or  actions,  following  the  delivery  of the
decision  of the  arbitrator  finding  in favor of the  Employee.  Further,  the
settlement of the dispute to be approved by the Board of the Savings Bank or the
Parent may  include a provision  for the  reimbursement  by the Savings  Bank or
Parent  to the  Employee  for  all  reasonable  costs  and  expenses,  including
reasonable  attorneys' fees, arising from such dispute,  proceedings or actions,
or the

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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.

      18. 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.

      IN WITNESS  WHEREOF,  the parties have executed this  Agreement on the day
and first hereinabove written.



                                    Advance Financial Savings Bank



ATTEST:                             By:
                                       ---------------------------------------



----------------------------------
Secretary


WITNESS:


----------------------------------     ---------------------------------------
                                       Stephen M. Gagliardi
                                       Employee