CONFIDENTIAL
                                  ------------

                                February 18, 2003

BY HAND DELIVERY
----------------

Mr. Cameron D. McKeel
1267 Mary Street
Camden, Arkansas 71701

Dear Mr. McKeel:

     This letter sets forth the terms and  conditions  of your  separation as an
employee of HCB Bancshares,  Inc. (the  "Company") and HEARTLAND  Community Bank
(the "Bank"). Upon your acceptance of the terms and conditions set forth in this
letter  agreement  and  general  release  (referred  to  herein  as the  "Letter
Agreement"),  the  Company  and the Bank  will  provide  you with the  severance
package  described  below  pursuant to the  conditions  set forth in this Letter
Agreement.  Please review this document carefully and, if you choose, consult an
attorney of your choice.  Your signing of this Letter Agreement also constitutes
an  acknowledgement  by you that there is consideration from the Company and the
Bank to you for the provisions contained in this Letter Agreement.

     1. LAST DATE OF EMPLOYMENT.
        ------------------------
     Your last date of employment  with the Company and the Bank is February 17,
2003 (the "Termination Date"). You will be paid your salary through February 17,
2003, in accordance with Bank's regular payroll practices. In addition, you will
be paid for your unused  vacation  time accrued  through the date of this Letter
Agreement in accordance with the Company's and the Bank's policies on payment of
unused  vacation  time.  All other  monies  due and owing have been paid to you.
Effective as of the date of this Letter Agreement, you acknowledge that you have
resigned  as an  officer  of the  Company  and  the  Bank  and  of any of  their
respective divisions, parent corporations,  subsidiaries,  related companies and
affiliates.  You further  acknowledge that you previously resigned as a director
of the Company and the Bank effective February 7, 2003.

     2. OTHER HEALTH AND INSURANCE BENEFITS.
        ------------------------------------
     You  are  entitled  to  participate  in  the  Consolidated  Omnibus  Budget
Reconciliation  Act ("COBRA") relating to the continuation of medical and dental
insurance  benefits for you. The Bank will pay 70% of your entire COBRA  premium
for the current  medical and dental  benefits  (for family  coverage)  for COBRA
continuation coverage for the period from February 17, 2003 through February 28,
2003. Thereafter (if you elect COBRA coverage),  you will be responsible for the
entire  cost of the  coverage.  The Bank  will  send  you a notice  specifically
relating to these COBRA benefits under separate cover.



<PAGE>
Mr. Cameron D. McKeel
February 18, 2003
Page 2

     All other  employee  benefits  not  specifically  continued  by this Letter
Agreement  terminated  effective February 17, 2003. The provisions  contained in
this  paragraph  are not  intended  to extend your COBRA  continuation  coverage
beyond the otherwise  applicable  COBRA  period.  The benefits set forth in this
paragraph are conditioned on your signing this Letter Agreement.

     3. ADDITIONAL COMPENSATION.
        ------------------------

     The Bank will pay you no later the  tenth day  following  the date on which
you execute this Letter  Agreement  the gross sum of  $75,000.00.  The Bank will
withhold from this amount all  applicable  federal,  state and local taxes,  and
other designated or required withholdings.

     In  addition,  the Bank will pay you no later the tenth day  following  the
date on which you execute this Letter Agreement the gross sum of $5,922.19.  The
Bank will  withhold  from this amount all  applicable  federal,  state and local
taxes, and other designated or required withholdings.

     In addition,  the Bank will,  at its expense,  continue to provide you with
the life  insurance you currently  receive for the period from February 17, 2003
through  November 30,  2003.  Your  disability  insurance  will be  discontinued
effective February 17, 2003.

     You agree that the  consideration  set forth in  paragraph 3 of this Letter
Agreement  constitutes  an  enhanced  separation  package to which you would not
otherwise be  entitled,  and you agree that this  consideration  is adequate and
satisfactory to you.

     4. PARTICIPATION IN COMPANY AND BANK BENEFIT PLANS
        -----------------------------------------------

     (a) You shall be entitled to receive payments, benefits,  distributions and
awards,  to the extent such  payments,  benefits,  distributions  and awards are
vested as of February  17,  2003,  from the  following  Company and Bank benefit
plans in which you currently participate:  (i) the HCB Bancshares, Inc. Employee
Stock  Ownership  Plan (the "ESOP");  (ii) the HCB  Bancshares,  Inc. 1998 Stock
Option Plan; and (iii) the First Federal Savings and Loan Association Directors'
Retirement Plan (such benefit plans are  collectively  referred to herein as the
"Plans"). Such payments, benefits, distributions and awards will be made at such
times  and in  such  forms,  and in all  other  manners  will  be  effected,  in
accordance  with the terms of the Plans as are  currently in effect and pursuant
to such election forms, most currently in effect, as you have completed pursuant
to such Plans as of the date of this Letter Agreement.

     (b) You agree that you will forfeit unvested  benefits or awards previously
made to you under the Plans. In addition,  you acknowledge that you will forfeit
5,290  unvested  shares of restricted  Company Common Stock awarded to you under
the HCB Bancshares,  Inc.  Management  Recognition  Plan,  which shares have not
vested as of the date of this Letter Agreement.


<PAGE>
Mr. Cameron D. McKeel
February 18, 2003
Page 3

     5. DELIVERY OF PAYMENTS.
        ---------------------

     Any payments made in  connection  with this Letter  Agreement  will be made
pursuant to the Company's and the Bank's standard  practices and pursuant to the
terms of the  applicable  benefit  plan under  which  payment is made.  Your pay
statement will be sent to your home address, by United States first class mail.

     6. RETURN OF COMPANY AND BANK PROPERTY.
        ------------------------------------

     You hereby  represent and warrant that you have returned to the Company and
the  Bank  any and all of  their  property  and  documents  you may have in your
possession,  custody or  control,  including  but not limited to any keys to any
Company or Bank office or to the office of any  subsidiary of the Company or the
Bank.

     7. CONFIDENTIALITY.
        ----------------

     The  terms  and  conditions  of  this  Letter   Agreement   shall  be  kept
confidential by you until such time as the Company files this Agreement pursuant
to the Securities Exchange Act of 1934, as amended, except that you may disclose
the terms and  conditions of this Letter  Agreement to your spouse,  attorney(s)
and/or tax advisor  provided that they also agree to keep this Letter  Agreement
and its terms and conditions confidential.

     8. GENERAL RELEASE.
        ----------------

     (a) In consideration  for the above payments,  and all of the terms of this
Letter  Agreement,   you,  Cameron  D.  McKeel,   for  yourself,   your  agents,
representatives,  executors, administrators,  heirs, successors and assigns, and
all persons connected therewith who might claim by, through or under them or any
of them  (individually and collectively  referred to as "Releasors"),  do hereby
release, remise and forever discharge HCB Bancshares,  Inc., HEARTLAND Community
Bank, and all of their respective divisions, parent corporations,  subsidiaries,
related companies and affiliates,  and all of their present and former officers,
directors,   employees,   predecessors,   successors,  heirs,  assigns,  agents,
attorneys,  representatives,  executors and administrators and any other person,
firm,  corporation or other entity charged or chargeable with  responsibility or
liability for the actions of any of them (individually and collectively referred
to as  "Releasees") of and from any and all claims,  demands,  causes of action,
actions, rights, damages,  judgments,  costs, compensation,  suits, debts, dues,
accounts,  bonds,  covenants,  agreements,  expenses,  attorneys' fees, damages,
penalties, punitive damages and liability of any nature whatsoever, in law or in
equity or otherwise,  which the Releasors have had, now have,  shall or may have
in the future,  whether known or unknown,  foreseen or unforeseen,  suspected or
unsuspected,  by  reason  of any  cause,  matter  or thing  whatsoever  from the
beginning  of time up to and  including  the date  that  this  Letter  Agreement
becomes effective.

     (b) By the release set forth above,  you,  Cameron D.  McKeel,  acknowledge
that you and all Releasors are giving up all claims and causes of action against
Releasees,



<PAGE>
Mr. Cameron D. McKeel
February 18, 2003
Page 4

including  but not  limited to all  claims and causes of action  related to your
employment with the Company and the Bank and the termination of that employment,
including  claims  for  breach  of  contract  or  implied  contract,   wrongful,
retaliatory or constructive  discharge,  negligence,  misrepresentation,  fraud,
detrimental  reliance,  promissory  estoppel,  defamation,  invasion of privacy,
impairment  of economic  opportunity,  intentional  or negligent  infliction  of
emotional distress,  any and all other torts, and claims for attorneys' fees and
costs, as well as the following statutory claims described below.

     (c) You, Cameron D. McKeel,  further  acknowledge that various local, state
and federal laws prohibit  discrimination  based on age,  gender,  race,  color,
national  origin,  religion,  disability,  veterans'  status or other  protected
classifications.  These include,  but are not limited to, Title VII of the Civil
Rights Act of 1964,  42 U.S.C.  section  2000e et seq.,  the Civil Rights Act of
1866 and 1870,  and the Civil Rights Act of 1991  (relating to gender,  national
origin,  religion, race and certain other kinds of job discrimination);  the Age
Discrimination  in Employment Act, 29 U.S.C.  section 621 et seq., and the Older
Worker  Benefit  Protection  Act,  29 U.S.C.  section  626(f)  (relating  to age
discrimination in employment); the Rehabilitation Act of 1973, 29 U.S.C. section
701 et seq., and the Americans with Disabilities Act, 42 U.S.C. section 12101 et
seq.  (relating to  discrimination  on the basis of disability);  Arkansas Civil
Rights  Act  of  1993,   section  16-123-101  et  seq.  (state  law  prohibiting
discrimination  in  employment  on  various  bases).  You  also  understand  and
acknowledge  that there are various  federal and state laws  governing  employee
benefit issues,  wage and hour issues, and other employment  issues,  including,
but not limited to, the Employee  Retirement  Income  Security Act of 1974,  the
National Labor  Relations Act, the Fair Labor  Standards Act, 29 U.S.C.  section
201 et seq.,  the Equal Pay Act of 1963,  the  Family and  Medical  Leave Act of
1993, the Arkansas Equal Pay Law, Arkansas wage and hour laws, and various state
wage payment and/or hour laws. You acknowledge that you are giving up any claims
you may have under any of these statutes and under any other  federal,  state or
municipal statute,  ordinance,  executive order, rule or regulation  relating to
discrimination in employment,  wage and hour issues, or in any way pertaining to
employment relationships.

     (d) You further  agree that neither you, nor anyone on your behalf shall or
may seek, make  application  for, or be entitled to recover  attorneys' fees and
costs pursuant to any of the aforementioned  federal, state, municipal statutes,
orders,  rules or  regulations,  or any other  such  laws.  You  understand  and
acknowledge  that the release set forth in this paragraph  applies to all causes
of  action  or  claims  against   Releasees,   including  but  not  limited  to,
employment-related claims, which you now have or may have had from the beginning
of time up to the date that this Letter Agreement becomes effective.

     (e)  You further acknowledge and represent as follows:

          (i) You have carefully read and fully understand all of the provisions
     of this  Letter  Agreement,  including  the fact  that you have  agreed  to
     release and forever  discharge the Releasees  from any legal action arising
     out of your  employment  with the  Company  and the  Bank,  the  terms  and
     conditions of such employment, and the termination of that employment;



<PAGE>
Mr. Cameron D. McKeel
February 18, 2003
Page 5

          (ii) You waive all rights or claims  against  Releasees  under the Age
     Discrimination  and Employment Act, 29 U.S.C.  section 621 et seq. ("ADEA")
     or otherwise,  knowingly and voluntarily in exchange for  consideration  of
     value to which you are not otherwise entitled;

          (iii) You have been  advised in writing by the  Company  and the Bank,
     and you have  been  given a  reasonable  opportunity,  to  consult  with an
     attorney  or  advisor  of  your  choice  in  connection  with  this  Letter
     Agreement,  and your  decision  to waive any  rights or claims you may have
     against Releasees under the ADEA or otherwise;

          (iv) You have  been  given a period of at least  twenty-one  (21) days
     within which to consider  this Letter  Agreement and your decision to enter
     into this Letter Agreement;

          (v) You have been informed by the Company and the Bank,  that you have
     a period of seven (7) days from the date of execution to revoke this Letter
     Agreement,  which  shall not become  effective  or  enforceable  until this
     revocation period has expired;

          (vi) You understand  that any revocation you make shall be in writing,
     sent by  facsimile,  hand  delivery or overnight  mail to Paula  Bergstrom,
     Corporate  Secretary for the Bank, at HEARTLAND Community Bank, 237 Jackson
     Street, Camden, Arkansas 71701; and

          (vii) You further  understand  that if you revoke your  acceptance  as
     described  above,  this  Letter  Agreement  shall  be null  and void in its
     entirety.

     9. RESTRICTIONS ON USE OF CONFIDENTIAL INFORMATION.
        ------------------------------------------------

     During  your   employment  by  the  Company  and  the  Bank,  you  acquired
information  concerning the Company's and the Bank's business plans,  methods of
doing business,  trade secrets,  financial  affairs,  financial and other record
systems,  pricing,  computer  programs  and system  documentation,  and computer
hardware and software programs,  as well as information  concerning the business
and affairs of the Company's and the Bank's present affiliates,  and information
concerning  their  clients,   potential  clients,   and  other  confidential  or
proprietary  information  belonging to or relating to the Company or the Bank or
any present  affiliate (any of the foregoing to be referred to as  "Confidential
Information" herein). You agree that you always will maintain as secret and will
not disclose any  Confidential  Information to any third party without the prior
express written authorization of one of the Company's or the Bank's officers.



<PAGE>
Mr. Cameron D. McKeel
February 18, 2003
Page 6



     10. NO RE-EMPLOYMENT.
         -----------------

     You agree that your employment  relationship  with the Company and the Bank
has been  permanently and  irrevocably  severed as of February 17, 2003, and you
release any right or claimed right to re-employment  or  reinstatement  with the
Company and the Bank. You further agree that you will not seek employment in the
future  with  the  Company  and  the  Bank  or any of  their  divisions,  parent
corporations, affiliates, subsidiaries or related companies.

     11. UNEMPLOYMENT COMPENSATION.
         --------------------------

     The Company and the Bank will not contest or object to any  application you
may make for unemployment compensation.

     12. INFORMATION TO FUTURE EMPLOYERS.
         --------------------------------

     The Company and the Bank will provide,  if requested,  confirmation  of the
dates of your employment, your job title and your salary.

     13. NO ADMISSION.
         -------------

     This  Letter  Agreement  is not,  and  shall  not be  construed  to be,  an
admission of liability,  culpability or any other legal conclusion.  You and the
Company and the Bank expressly agree and understand that no party to this Letter
Agreement is to be considered the "prevailing" or "successful"  party within the
meaning of any federal, state or local statute, ordinance, rule or regulation.

     14. SATISFACTORY AND COMPLETE PACKAGE.
         ----------------------------------

     The compensation  package described in this Letter Agreement is an enhanced
salary  continuation  and benefits  package that you acknowledge is adequate and
satisfactory to you. You further acknowledge and agree that you are not entitled
to and will not seek  payment of any other  compensation  or  benefits  from the
Company or the Bank or any of Releasees,  including but not limited to,  salary,
vacation or sick pay, bonus,  reimbursement of expenses,  or payment for various
employee benefits.

     15. COOPERATION ON PUBLIC ANNOUNCEMENTS
         -----------------------------------

     You and the Company and the Bank agree to cooperate in the  preparation  of
any public  announcements  to be made regarding your termination of service with
the  Company  and the  Bank  and of any of their  respective  divisions,  parent
corporations,  subsidiaries,  related  companies and  affiliates and this Letter
Agreement.



<PAGE>
Mr. Cameron D. McKeel
February 18, 2003
Page 7





     16. NO DISPARAGING COMMENTS OR RELATED ACTIVITIES
         ---------------------------------------------

     (a) You  shall  not make any  comment  or  remark,  or give any  advice  or
opinion, at any time, that impugns the integrity or harms the financial position
of the Company or the Bank and/or the  Company's or the Bank's  current or prior
directors,  officers,  employees,  agents or customers. The Company and the Bank
will not disparage or make any derogatory  comments about you to any prospective
employers.  The  Company's  and the Bank's  stated  position with regard to your
departure from the Company and the Bank will be that you voluntarily resigned.

     (b) Mr. McKeel agrees that he will not (a) solicit proxies,  or participate
in any manner in the solicitation of proxies, from the Company's stockholders to
elect persons to the Board of Directors or to approve shareholder proposals,  or
(b) make any public statement critical of the Company, its Board of Directors or
management.

     17. ASSIGNMENT, SUCCESSORS, ETC.
         ----------------------------

     This Letter  Agreement may be assigned by the Company and the Bank and will
take effect for the benefit of any  successors or assigns of the Company and the
Bank created by merger, reorganization,  sale of assets or otherwise. You hereby
consent  and  agree  to such  assignment  and  enforcement  of such  rights  and
obligations by the Company's and the Bank's successors or assigns.

     18. ENTIRE AGREEMENT.
         -----------------

     You acknowledge  that this Letter  Agreement is our entire  agreement.  You
acknowledge that there are no  representations  by the Company or the Bank, oral
or  written,  which are not set forth in this  Letter  Agreement  upon which you
relied in signing  this  Letter  Agreement.  You  further  acknowledge  that the
headings in this Letter  Agreement are for convenience  only and have no bearing
on the meaning of this Letter  Agreement.  You and the Company and the Bank also
agree that this  Letter  Agreement  cannot be  altered,  modified  or  otherwise
changed except by a writing signed by all of us.

     19. ACKNOWLEDGMENT.
         ---------------

     YOU  ACKNOWLEDGE  THAT YOU HAVE CAREFULLY READ AND FULLY  UNDERSTAND ALL OF
THE  PROVISIONS  OF THIS LETTER  AGREEMENT AND THAT YOU HAD THE  OPPORTUNITY  TO
DISCUSS  THIS LETTER  AGREEMENT  WITH AN ATTORNEY  OF YOUR  CHOICE.  YOU FURTHER
UNDERSTAND  THAT BY  SIGNING  THIS  LETTER  AGREEMENT  WHICH  CONTAINS A GENERAL
RELEASE,  YOU ARE GIVING UP YOUR RIGHT TO BRING ANY CLAIMS,  COMPLAINTS OR OTHER
LEGAL ACTION AGAINST THE COMPANY AND THE BANK OR ANY OF THEIR RELATED  COMPANIES
DESCRIBED  ABOVE.  YOU  ACKNOWLEDGE  THAT  YOU ARE  ENTERING  INTO  THIS



<PAGE>
Mr. Cameron D. McKeel
February 18, 2003
Page 8

LETTER AGREEMENT KNOWINGLY, VOLUNTARILY AND OF YOUR OWN FREE WILL, AND INTENDING
TO BE LEGALLY BOUND THEREBY.

     If you choose to accept the terms of this Letter  Agreement,  you must sign
it and return it to me by Tuesday, March 11, 2003. If you do not return it to us
signed and  notarized by that date, we shall assume that you have elected not to
accept  the  terms  and  conditions  of this  Letter  Agreement  and it shall be
considered null and void. Your signature below indicates your acceptance of this
Letter  Agreement and shall cause this Letter  Agreement to be binding upon you,
your heirs, representatives and assigns.

     We wish you success in the future.

                                       Very truly yours,

                                       HCB BANCSHARES, INC.


                                       By:/s/ Vida H. Lampkin
                                          --------------------------------------
                                          Vida H. Lampkin
                                          Chairman of the Board

                                        HEARTLAND COMMUNITY BANK


                                        By:/s/ Vida H. Lampkin
                                           -------------------------------------
                                           Vida H. Lampkin
                                           Chairman of the Board

Accepted and Agreed to on
this 19 day of February, 2003.
     --        --------

By:/s/ Cameron D. McKeel
   ---------------------------------------
   Cameron D. McKeel


Sworn to and subscribed before me
this 19 day of February, 2003.
     --        --------


/s/ Jennifer Patterson
--------------------------------------
Notary Public