**Exhibit 10.8**

 

|  | UNITED STATES  OF AMERICA Before the OFFICE OF THRIFT SUPERVISION In the Matter of Order  No.: WN-10-14 FIRST FEDERAL BANCSHARES OF OF ARKANSAS, INC.  Effective Date: April 14, 2010 Harrison, Arkansas OTS Docket No. H2658 ORDER TO CEASE AND DESIST  WHEREAS, First Federal Bancshares of Arkansas, Inc., Harrison, Arkansas, OTS Docket No. H2658 (Holding Company), by and through  its Board of Directors (Board), has executed a Stipulation and Consent to the  Issuance of an Order to Cease and Desist (Stipulation); and WHEREAS, the  Holding Company, by executing the Stipulation, has consented and agreed to  the issuance of this Order to Cease and Desist (Order) by the Office of  Thrift Supervision (OTS) pursuant to 12 U.S.C. § 1818(b); and WHEREAS, pursuant to delegated  authority, the OTS Regional Director for the  Western Region (Regional Director) is authorized to issue Orders to Cease and  Desist where a savings and loan holding company has consented to the issuance  of an order. NOW, THEREFORE, IT IS ORDERED that: First Federal Bancshares of  Arkansas, Inc. Order to Cease and Desist Page 1 of 11 |
|--|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

 

|  | Cease and  Desist. 1. The Holding Company and its directors, officers, employees, and  agents shall cease and desist from any action (alone or with another or  others) for or toward causing, bringing about, participating in, counseling,  or the aiding and abetting of unsafe or unsound practices that resulted in:  (a) the Holding Company’s failure to identify, measure, monitor, and control  specific risks to the Holding Company’s operations; (b) the operation of the  Holding Company and its subsidiary insured depository institution, First  Federal Bank, Harrison, Arkansas, OTS Docket No.  02721 (Association), with inadequate capital and earnings to support its risk  profile; and (c) the operation of the Association with an inadequate level of  capital protection for the volume, type, and quality of assets held by the  Association. Capital Augmentation Plan. 2. By June 30, 2010, the Holding  Company shall submit plan to preserve and enhance the capital of the Holding  Company and the Association and to ensure that the Association complies with  the capital requirements imposed by the Order to Cease and Desist issued by  the OTS against the Association on April 14, 2010  (Capital Augmentation Plan). At a minimum, the Capital Augmentation Plan  shall: (a) address the requirements and restrictions imposed by this Order  and the Order to Cease and Desist issued by the OTS  against the Association on April 14, 2010 (Association Order) relating to  capital; (b) detail the Holding Company’s capital preservation and  enhancement strategies with specific narrative goals; First Federal  Bancshares of Arkansas, Inc. Order to Cease and Desist Page 2 of 11 |
|--|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

 

|  | (c) identify  the specific sources of additional capital and the timeframes and methods by  which additional capital will be raised, including specific target dates and  capital levels; (d) establish an alternative strategy, including, but not  limited to, seeking a merger or an acquisition partner for the Holding  Company and/or the Association, to be implemented immediately if the Board’s  primary strategy to raise additional capital is unsuccessful; and (e) require  the Senior Executive Officers(1) (Management) Board to prepare and submit for  the Board’s review, at each regular monthly meeting, a written report  regarding the Holding Company’s compliance with the Capital Augmentation Plan  and the Association’s compliance with its Capital Plan. 3. Upon receipt of  written notification from the Regional Director that the Capital Augmentation  Plan is acceptable, the Holding Company shall immediately implement the  Capital Augmentation Plan. 4. The Holding Company shall notify the Regional  Director regarding any material event adversely affecting or that may adversely  affect the capital or capital projections of the Holding Company within two  (2) days after such event. 5. Within thirty (30) days after:  (a) the Association fails to meet the capital requirements imposed by  Association Order; (b) the Holding Company fails to comply with the  Capital Augmentation Plan prescribed in Paragraph 2 of this Order; or  (c) a request from the Regional Director, the Holding Company shall  submit a written Contingency Plan that is acceptable to the  The term “Senior Executive Officer” is  defined at 12 C.F.R. § 563.555. First Federal Bancshares of Arkansas, Inc. Order to Cease and  Desist Page 3 of 11 |
|--|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

 

|  | Regional  Director. The Contingency Plan shall detail the actions to be taken, with  specific time frames, to achieve one of the following results by the later of  the date of receipt of all required regulatory approvals or sixty (60) days  after the implementation of the Contingency Plan: (i) a  merger of the Holding Company or the Association with, or the acquisition of  the Holding Company or the Association by, another federally insured  depository institution or holding company thereof; or (ii) voluntary  liquidation of the Association by filing an appropriate application with the OTS in conformity with federal laws and regulations. 6. Upon receipt of notification from  the Regional Director to implement the Contingency Plan, the Holding Company  shall implement the Contingency Plan immediately. By no later than the first  (1st) and fifteenth (15th) of each month following implementation of the Contingency  Plan, the Board shall provide the Regional Director with written status  reports detailing the Holding Company’s progress in implementing the  Contingency Plan. Business Plan.  7. By June 30, 2010, the Holding Company shall submit a written three-year  business plan (Business Plan) for the remainder of calendar year 2010 and  calendar years 2011 and 2012 that is acceptable to the Regional Director.  Thereafter, the Holding Company shall submit a revised two-year Business Plan  at least sixty (60) days prior to the end of each calendaryear. At a minimum, the Business  Plan shall: (a) address the requirements contained within this Order and the  comments contained within the OTS Report of  Examination of the Holding Company, dated September 21, 2009; First Federal  Bancshares of Arkansas, Inc. Order to Cease and Desist Page 4 of 11 |
|--|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

 

|  | (b) include  defined strategies for capital enhancement with the capital maintenance  requirements of the Capital Augmentation Plan adopted pursuant to Paragraph 2  of this Order; (c) include a detailed narrative of the Board’s plans and  strategies to strengthen and improve the Holding Company’s, as well as the  consolidated enterprise’s operations, earnings, and profitability; (d)  include a detailed discussion of the Holding Company’s current financial  position and resources and the Board’s strategies for preserving and  enhancing the Holding Company’s financial resources to meet the needs of the  consolidated enterprise under the Business Plan, adequately support the  Association’s risk profile, maintain compliance with applicable regulatory  requirements and this Order and satisfy the Association’s liquidity needs;  (e) require quarterly pro forma financial projections (balance sheet, income  statement, and budget) for each quarter covered by the Business Plan,  beginning with the quarter ending March 31, 2010; (f) identify all  relevant assumptions and documentation, including documentation supporting  such assumptions and projections; and (g) a contingency plan that addresses  under three (3) different scenarios involving progressively stressed  economic environments: (i) projected  short-term and long-term sources of liquidity and cash flow, both into and  out of the Holding Company; (ii) the payment of the operating expenses  of the Holding Company; and (iii) the payment of dividend on common  stock, and the payment of dividends on preferred stock issued under First  Federal Bancshares of Arkansas, Inc. Order to Cease and Desist Page 5 of 11 |
|--|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

 

|  | the Troubled Asset  Relief Program’s Capital Purchase Program, without the reliance of capital  distributions or any other payments from the Association. 8. Upon receipt of  written notification from the Regional Director that the Business Plan is  acceptable, the Holding Company shall implement and adhere to the Business  Plan. The Holding Company shall retain all documentations supporting  assumptions addressed in Paragraph 7(f) of this Order. 9. Any material modification(2) to the Business Plan must receive the  prior written notice of non-objection of the Regional Director. The Holding  Company shall submit any proposed material modifications to the Regional  Director at least forty-five (45) days prior to implementation. 10. Within  thirty (30) days after the end of each quarter, beginning with the quarter ending  June 30, 2010, the Board shall review quarterly variance reports on the  Holding Company’s compliance with the Business Plan (Quarterly Variance  Reports). The Quarterly Variance Reports shall: (a) identify material  variances in the Holding Company’s actual performance during the preceding  quarter as compared to the projections set forth in the Business Plan; (b)  contain an analysis and explanation of identified variances; and (c) discuss  the specific measures taken to address identified variances. 11. The Board’s  review of the Quarterly Variance Reports, assessment of the Holding Company’s  compliance with the Business Plan, and any corrective actions taken or to be  taken (2) A modification shall be considered material under this Paragraph  of the Order if the Holding Company plans to: (a) engage in any activity  that is inconsistent wit the Business Plan; or (b) exceed the level of  any activity contemplated in the Business Plan or fail to meet target amounts  established in the Business Plan by more than ten percent (10%), unless the  activity involves assets risk-weighted fifty percent (50%) or less, in which  case a variance of more than twenty-five percent (25%) shall be deemed to be  a material modification. First Federal  Bancshares of Arkansas, Inc. Order to Cease and Desist Page 6 of 11 |
|--|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

 

|  | by the Board  shall be fully documented in the Board meeting minutes. A copy of the  Quarterly Variance Reports and the Board meeting minutes detailing the  Board’s review shall be provided to the Regional Director within fifteen (15)  days after the Board meeting. Dividends.  12. Effective immediately, the Holding Company shall not declare, make, or  pay any cash dividends or other capital distributions or purchase, repurchase  or redeem or commit to purchase, repurchase, or redeem any Holding Company  equity stock without the prior written non-objection of the Regional  Director. The Holding Company shall submit its written request for  non-objection to the Regional Director at least forty-five (45) days prior to  the anticipated date of the proposed dividend, capital distribution, or stock  transaction. The written request for such notice of non-objection shall:  (a) contain current and pro forma projections regarding the Holding  Company’s capital, asset quality, and earnings; and (b) address  compliance with the Capital Plan required by Paragraph 2 of this Order. 13.  Effective immediately, the Holding Company shall not issue a new class of  stock or change the terms of any existing classes of stock, or convert any  class of stock into another class of stock without the prior written notice  of non-objection of the Regional Director. The Holding Company shall submit  its written request for non-objection to the Regional Director at least  forty-five (45) days prior to the anticipated date of the proposed  transaction. Debt Restrictions.  14. Effective immediately, the Holding Company not, directly or indirectly,  incur, issue, renew, or rollover any debt, or commit to so without the prior  written non-objection of the Regional Director. The Holding Company shall  submit its written request for non-objection to the Regional Director at  least forty-five (45) days prior to the anticipated date of the proposed  First Federal Bancshares of Arkansas, Inc. Order to Cease and Desist Page 7  of 11 |
|--|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

 

|  | debt transaction.  The Holding Company’s written request for the Regional Director’s non-objection  to engage in such debt transactions, at a minimum, shall: (a) describe  the purpose of the proposed debt; (b) set forth and analyze the terms of  the proposed debt and covenants; (c) analyze the Holding Company’s  current cash flow resources available to satisfy such debt repayment; and  (d) set forth the anticipated source(s) of repayment of the  proposed debt. For purposes of this Paragraph of the Order, the term “debt” includes,  but is not limited to, loans, bonds, cumulative preferred stock, hybrid  capital instruments such as subordinated debt or trust preferred securities,  and guarantees of debt. For purposes of this Paragraph of this Order, the  term “debt” does not include liabilities that are incurred in the ordinary  course of business to acquire goods and services and that are normally  recorded as accounts payable under generally accepted accounting principles. Employment Contracts and Compensation  Arrangements. 15. Effective immediately, the Holding Company shall not  enter into, renew, extend, or revise any contractual arrangement related to  compensation or benefits with any director or Senior Executive Officers of  the Holding Company, unless it first provides the Regional Director with not  less than sixty (60) days prior written notice of the proposed transaction.  The notice to the Regional Director shall include a copy of the proposed  employment contract or compensation arrangement, or a detailed written  description of the compensation arrangement to be offered to such director or  officer, including, but not limited to all benefits and perquisites. The  Board shall ensure that any contract, agreement, or arrangement submitted to  the Regional Director fully complies with the requirements of 12 C.F.R. Part 359 and 31 C.F.R.  Part 30. First Federal Bancshares of Arkansas, Inc. Order to Cease and  Desist Page 8 of 11 |
|--|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

 

|  | Severance and Indemnification Payments. 16. Effective immediately, the Holding Company shall not make  any golden parachute payment(3) or any prohibited indemnification  payment(4) unless, with respect to each such payment, the Holding  Company has complied with the requirements of 12 C.F.R.  Part 359. Effectively immediately, the Holding Company shall comply with  31 C.F.R. § 30.9. Directorate and Management Changes. 17. Effective immediately,  the. Holding Company shall comply with the prior notification requirements  for changes in directors and Senior Executive Officers set forth in 12 C.F.R. Part 563, Subpart H. Affiliate Transactions. 18. Effective immediately, the Holding  Company shall not engage in transactions with the Association without the  prior written non-objection of the Regional Director, except: (a) exempt  transactions under 12 C.F.R. Part 223; and (b) intercompany cost-sharing transactions and tax sharing  pursuant to an executed written agreements between the parties, provided that  such transactions comply with 12 C.F.R.  Part 223 and 12 C.F.R. § 563.41. The Holding  Company shall provide thirty (30) days advance written notice to the Regional  Director of any proposed affiliate transaction and shall include a full  description of the transaction. Compliance  with this Order. 19. Within thirty (30) days after the end of each  month, beginning with the month ending March 31, 2010, the Board shall  adopt a board resolution (Compliance Resolution) formally resolving that the  Association has complied with each provision of this Order currently in  effect (3) The term “golden parachute payment” is defined at 12 C.F.R. § 359.1(f).(4) The term  “prohibited indemnification payment” is defined at 12 C.F.R.  § 359.1(1). First Federal Bancshares of  Arkansas, Inc. Order to Cease and Desist Page 9 of 11 |
|--|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

 

|  | during the  immediately preceding month, except as otherwise stated. The Compliance  Resolution shall: (a) specify in detail any instance of noncompliance;  (b) set forth the corrective action initiated or taken in each instance  of noncompliance; and (c) identity all notices of exemption or  non-objection issued by the Regional Director. Within fifteen (15) days of  the Board meeting at which the Compliance Resolution was adopted, the  Association shall provide a copy of each Compliance Resolution to the  Regional Director. Effective Date, Incorporation of Stipulation. 20. This Order is effective on the Effective Date as shown on  the first page. The Stipulation is made a part hereof and is incorporated  herein by this reference. Duration. 21. This Order shall remain in effect until terminated,  modified, or suspended by written notice of such action by the OTS, acting by and through its authorized  representatives. Time Calculations. 22.  Calculation of time limitations for compliance with the terms of this Order  run from the Effective Date and shall be based on calendar days, unless otherwise  noted. 23. The Regional Director, or an OTS  authorized representative, may extend any of the deadlines set forth in the  provisions of this Order upon written request by the Holding Company that  includes reasons in support for any such extension. Any OTS  extension shall be made in writing. Submissions and Notices. 24. All  submissions, including any reports, to the OTS that  are required by or contemplated by this Order shall be submitted within the  specified timeframes. First Federal Bancshares of Arkansas, Inc. Order to  Cease and Desist Page 10 of 11 |
|--|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

 

|  | 25. Except as  otherwise provided herein, all submissions, requests, communications,  consents, or other documents relating to this Order shall be in writing and  sent by first class U.S. mail (or by reputable overnight carrier, electronic  facsimile transmission, or hand delivery by messenger) addressed as follows:  (a) To the OTS: C.K. Lee,  Regional Director Attn Vivian Carlton, Assistant Director Office of Thrift  Supervision 225 H. John Carpenter Freeway, Suite 500 Irving, Texas  75062-2326 Fax No. (972)277-9501 (b) To the Holding Company: Larry J.  Brandt, Chief Executive Officer First Federal Bancshares of  Arkansas, Inc. 1401 Highway 62-65 North Harrison. Arkansas 72601-4226  Fax No. (870)365-8355 No Violations Authorized. 26. Nothing in this  Order or the Stipulation shall be construed as allowing the Holding Company,  its Board, officers, or employees to violate any law, rule, or regulation. IT IS SO ORDERED. OFFICE OF THRIFT  SUPERVISION By: C.K. Lee Regional  Director, Western Region Date: See Effective Date on page 1 First Federal Bancshares of Arkansas, Inc. Order to Cease  and Desist Page 11 of 11 |
|--|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|