EXHIBIT 10.1



 Exhibit 10.1 
 EMPLOYMENT AGREEMENT 
 THIS AGREEMENT (the “Agreement”), was originally entered into
on June 25, 2003, by and among JEFFERSON BANCSHARES, INC. (the “Company”), JEFFERSON FEDERAL BANK (the “Bank”) and ANDERSON L. SMITH (“Executive”) and was subsequently amended on July 1,
2004. The Agreement is now amended and restated in its entirety as of December 18, 2008. 
 WITNESSETH 
 WHEREAS, the Company and the Bank desire to continue to retain the services of the Executive as the President and Chief Executive Officer of the Company
and the Bank; and 
 WHEREAS, the parties to the Agreement desire to amend and restate the Agreement in its entirety for the purpose of
bringing the Agreement into compliance with Section 409A of the Internal Revenue Code of 1986, as amended (the Code”); 
 NOW,
THEREFORE, in consideration of the mutual covenants herein contained, and upon the other terms and conditions hereinafter provided, the parties hereby agree as follows: 
 1. Employment. Executive is employed as the President and Chief Executive Officer and of the Company and the Bank. Executive shall perform all duties and shall have all powers which are commonly incident
to the offices of President and Chief Executive Officer and which, consistent with those offices, are delegated to him by the Chairman of the Board of Directors of the Bank and the Company. 
 2. Location and Facilities. Executive will be furnished with the working facilities and staff customary for executive officers with the
title and duties set forth in Section 1 and as are necessary for him to perform his duties. The location of such facilities and staff shall be at the principal administrative offices of the Company and the Bank, or at such other site or sites
customary for such offices. 
 3. Term. 
  

	 	a.	The term of this Agreement shall be (i) the initial term, consisting of the period commencing on June 25, 2003 (the “Effective Date”) and ending on the third
anniversary of the Effective Date, plus (ii) any and all extensions of the initial term made pursuant to this Section 3. 

  

	 	b.	Commencing on the first year anniversary date of this Agreement, and continuing on each anniversary thereafter, the disinterested members of the boards of directors of the Bank and
the Company may extend the Agreement an additional year such that the remaining term of the Agreement shall be thirty-six (36) months, unless Executive elects not to extend the term of this Agreement by giving written notice in accordance with
Section 19 of this Agreement. The Board of Directors of the Bank (the “Board”) will review the Agreement and Executive’s performance annually for purposes of determining whether to extend the Agreement and the rationale and
results thereof shall be included in the minutes of the Board’s meeting. The Board of Directors of the Bank shall give notice to Executive as soon as possible after such review as to whether the Agreement is to be extended.


  

 1 








 4. Base Compensation. 
  

	 	a.	The Company and the Bank agree to pay the Executive during the term of this Agreement a base salary at the rate of $210,000 per year, payable in accordance with customary payroll
practices. 

  

	 	b.	The Board shall review annually the rate of the Executive’s base salary based upon factors they deem relevant, and may maintain or increase his salary, provided that no such
action shall reduce the rate of salary below the rate in effect on the Effective Date. 

  

	 	c.	In the absence of action by the Board, the Executive shall continue to receive salary at the annual rate specified on the Effective Date or, if another rate has been established
under the provisions of this Section 4, the rate last properly established by action of the Board under the provisions of this Section 4. 

  

	 	d.	The Company and the Bank intend to allocate the compensation expenses associated with Executive’s performance of services under this Agreement in accordance with the terms of
the Expense Allocation Agreement entered into between the Bank and the Company. 

 5. Bonuses. In lieu of any
bonus normally provided to permanent full-time employees of the Bank, the Bank agrees to provide a bonus program to the Executive which will provide the Executive with the opportunity to earn up to 50% of the Executive’s base salary, on an
annual basis, the amount of which shall be determined by specific performance standards and a formula agreed to by Executive and the Bank annually. Performance standards shall be measured on a fiscal year, and no bonus shall be payable if Executive
is not employed on June 30 of the year in question; provided, however, in the event of death of the Executive, the bonus for the fiscal year of Executive’s death shall be prorated on a quarterly basis, using the information for the
quarter(s) completed prior to Executive’s death. 
 6. Benefit Plans. The Executive shall be entitled to participate in
such life insurance, medical, dental, pension, profit-sharing, retirement and stock-based compensation plans and other programs and arrangements as may be approved from time to time by the Company and the Bank for the benefit of their employees. In
addition, during the term of this Agreement, the Bank shall provide the Executive with a supplemental life insurance policy with a death benefit of not less than $350,000. Notwithstanding the termination of this Agreement for any reason, other than
upon the Executive’s termination for Cause, the Bank further agrees that the Executive shall receive a supplemental retirement benefit of $15,083 per year, beginning during the calendar year in which the Executive attains age 65 and continuing
for a total of fifteen (15) years. 
 7. Vacation and Leave. 
  

	 	a.	The Executive shall be entitled to vacations and other leave in accordance with policy for senior executives, or otherwise as approved by the Board, but, in any event, not less than
four (4) weeks vacation annually. 

  

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

  

 2 








 8. Expense Payments and Reimbursements. The Executive shall be reimbursed for all
reasonable out-of-pocket business expenses that he shall incur in connection with his services under this Agreement upon substantiation of such expenses in accordance with applicable policies of the Company and the Bank. In addition, Executive shall
receive an allowance of $3,600 per year for dues in professional, social and civic organizations, and miscellaneous expenses, payable in equal monthly installments. 
 9. Automobile Allowance. During the term of this Agreement, the Executive shall be entitled to an annual automobile allowance of $12,000, payable in equal monthly installments. Executive shall comply
with reasonable reporting and expense limitations on the use of such automobile as may be established by the Company or the Bank from time to time, and the Company or the Bank shall annually include on Executive’s Form W-2 any amount of
income attributable to Executive’s personal use of such automobile. 
 10. Loyalty and Confidentiality; Noncompetition.

  

	 	a.	During the term of this Agreement, Executive: (i) shall devote all his time, attention, skill, and efforts to the faithful performance of his duties hereunder; provided,
however, that from time to time, Executive may serve on the boards of directors of, and hold any other offices or positions in, companies or organizations which will not present any conflict of interest with the Company and the Bank or any of their
subsidiaries or affiliates, unfavorably affect the performance of Executive’s duties pursuant to this Agreement, or violate any applicable statute or regulation and (ii) shall not engage in any business or activity contrary to the business
affairs or interests of the Company and the Bank. 

  

	 	b.	Nothing contained in this Agreement shall prevent or limit Executive’s right to invest in the capital stock or other securities of any business dissimilar from that of the
Company and the Bank, or, solely as a passive, minority investor, in any business. 

  

	 	c.	Executive agrees to maintain the confidentiality of any and all information concerning the operation or financial status of the Company and the Bank; the names or addresses of any
of its borrowers, depositors and other customers; any information concerning or obtained from such customers; and any other information concerning the Company and the Bank to which he may be exposed during the course of his employment. The Executive
further agrees that, unless required by law or specifically permitted by the Board in writing, he will not disclose to any person or entity, either during or subsequent to his employment, any of the above-mentioned information which is not generally
known to the public, nor shall he employ such information in any way other than for the benefit of the Company and the Bank. 

  

	 	d.	 Upon the termination of Executive’s employment hereunder for any reason, Executive agrees not to compete with the Bank for a period of two (2) years
following such termination in any city, town or county in which the Executive’s normal business office is located and the Bank has an office or has filed an application for regulatory approval to establish an office (or within a 60-mile radius
of each of such offices), determined as of the effective date of such termination, except as agreed to pursuant to a resolution duly adopted by the Board. Executive agrees that during such period and within said cities, towns and counties, Executive
shall not work for or advise, consult or otherwise serve with, directly or indirectly, any entity whose business materially competes with the depository, lending or other business activities of the Bank. The parties hereto, 



  

 3 









	 	 
recognizing that irreparable injury will result to the Bank, its business and property in the event of Executive’s breach of his obligations under this
paragraph and agree that in the event of any such breach by Executive, the Bank, will be entitled, in addition to any other remedies and damages available, to an injunction to restrain the violation hereof by Executive, Executive’s partners,
agents, servants, employees and all persons acting for or under the direction of Executive. Nothing herein will be construed as prohibiting the Bank from pursuing any other remedies available to the Bank for such breach or threatened breach,
including the recovery of damages from Executive. 


 11. Termination and Termination Pay. Subject to
Section 12 of this Agreement, Executive’s employment under this Agreement may be terminated in the following circumstances: 
  

	 	a.	Death. Executive’s employment under this Agreement shall terminate upon his death during the term of this Agreement, in which event Executive’s estate shall be
entitled to receive the compensation due to the Executive through the last day of the calendar month in which his death occurred. 

  

	 	b.	Retirement. This Agreement shall be terminated upon Executive’s retirement under the retirement benefit plan or plans in which he participates pursuant to Section 6
of this Agreement or otherwise. 

  

	 	c.	Disability. 

  

	 	i.	The Board or Executive may terminate Executive’s employment after having determined Executive has a Disability. For purposes of this Agreement, “Disability” means a
physical or mental infirmity that impairs Executive’s ability to substantially perform his duties under this Agreement and that results in Executive becoming eligible for long-term disability benefits under any long-term disability plans of the
Company and the Bank (or, if there are no such plans in effect, that impairs Executive’s ability to substantially perform his duties under this Agreement for a period of one hundred eighty (180) consecutive days). The Board shall determine
whether or not Executive is and continues to be permanently disabled for purposes of this Agreement in good faith, based upon competent medical advice and other factors that they reasonably believe to be relevant. As a condition to any benefits, the
Board may require Executive to submit to such physical or mental evaluations and tests as it deems reasonably appropriate. 

  

	 	ii.	 In the event of such Disability, Executive’s obligation to perform services under this Agreement will terminate. The Bank will pay Executive, as Disability
pay, an amount equal to seventy-five (75) percent of Executive’s weekly rate of base salary in effect as of the date of his termination of employment due to Disability. Disability payments will be made on a monthly basis and will commence
on the first day of the month following the effective date of Executive’s termination of employment for Disability and end on the earlier of: (A) the date he returns to full-time employment at the Bank in the same capacity as he was
employed prior to his termination for Disability; (B) his death; or (C) the remaining term of the Agreement (if the Agreement had not been earlier terminated by the Executive’s Disability). Such payments shall be reduced by the amount
of any short- or long-term disability benefits payable to the Executive under any other disability programs sponsored by the Company and the Bank. In addition, during any 



  

 4 









	 	 
period of Executive’s Disability, Executive and his dependents shall, to the greatest extent possible, continue to be covered under all benefit plans
(including, without limitation, retirement plans and medical, dental and life insurance plans) of the Company and the Bank, in which Executive participated prior to his Disability on the same terms as if Executive were actively employed by the
Company and the Bank. 


  

	 	d.	Termination for Cause. 

  

	 	i.	The Board may, by written notice to the Executive in the form and manner specified in this paragraph, immediately terminate his employment at any time, for “Cause”. The
Executive shall have no right to receive compensation or other benefits for any period after termination for Cause except for vested benefits. Termination for “Cause” shall mean termination because of, in the good faith determination of
the Board, Executive’s: 

  

	 	(1)	Personal dishonesty; 

  

	 	(2)	Incompetence; 

  

	 	(3)	Willful misconduct; 

  

	 	(4)	Breach of fiduciary duty involving personal profit; 

  

	 	(5)	Intentional failure to perform duties under this Agreement; 

  

	 	(6)	Willful violation of any law, rule or regulation (other than traffic violations or similar offenses), any felony conviction, any violation of law involving moral turpitude, or any
violation of a final cease-and-desist order; or 

  

	 	(7)	Material breach by Executive of any provision of this Agreement. 

  

	 	ii.	Notwithstanding the foregoing, Executive shall not be deemed to have been terminated for Cause by the Company and the Bank unless there shall have been delivered to Executive a copy
of a resolution duly adopted by the affirmative vote of a majority of the entire membership of the Board at a meeting of such Board called and held for the purpose (after reasonable notice to Executive), of finding that in the good faith opinion of
the Board, Executive was guilty of the conduct described above and specifying the particulars thereof. 

  

	 	e.	Voluntary Termination by Executive. In addition to his other rights to terminate under this Agreement, Executive may voluntarily terminate employment during the term of this
Agreement upon at least sixty (60) days prior written notice to the Board, in which case Executive shall receive only his compensation, vested rights and employee benefits up to the date of his termination. 

  

	 	f.	Without Cause or With Good Reason. 

  

	 	i.	 In addition to termination pursuant to Sections 11(a) through 11(e) the Board, may, by written notice to Executive, immediately terminate his employment at 



  

 5 









	 	 
any time for a reason other than Cause (a termination “Without Cause”) and Executive may, by written notice to the Board, terminate his employment
under this Agreement for “Good Reason” as defined below (a termination “With Good Reason”). 


  

	 	ii.	Subject to Section 12 of this Agreement, in the event of termination under this Section 11(f), Executive shall be entitled to receive a payment equal to the base salary
(determined by reference to the Executive’s base salary on the termination date) and bonuses (determined by reference to the Executive’s average bonus over the three (3) years preceding his termination date or such lesser period as he
was employed by the Bank) that would otherwise have been payable over the remaining term of the Agreement. Such amount shall be paid in one lump sum within ten (10) calendar days of such termination. Also, in such event, Executive shall, for
the remaining term of the Agreement, receive the benefits he would have received during the remaining term of the Agreement under any retirement programs (whether tax-qualified or non-qualified) in which Executive participated prior to his
termination (with the amount of the benefits determined by reference to the benefits received by the Executive or accrued on his behalf under such programs during the twelve (12) months preceding his termination) and continue to participate in
any benefit plans of the Company and the Bank that provide health (including medical and dental), life, or similar coverage upon terms no less favorable than the most favorable terms provided to senior executives of the Company and the Bank during
such period. In the event that the Company and the Bank are unable to provide such coverage by reason of Executive no longer being an employee, the Company and the Bank shall provide Executive with comparable coverage on an individual policy basis.


  

	 	iii.	For purposes of this Agreement “Good Reason” shall mean the occurrence of any of the following events without the Executive’s consent: 

  

	 	(1)	A material diminution in Executive’s Base Salary; 

  

	 	(2)	A material diminution of the Executive’s authority, duties, or responsibilities (including reporting requirements); or 

  

	 	(3)	A change in the geographic location at which the Executive must perform services for the Bank outside of the area consisting of a twenty-five (25) mile radius from the current
main office and any branch of the Bank; 

 provided, that within sixty (60) days after the initial existence of such event,
the Bank shall be given notice and an opportunity, not less than thirty (30) days, to effectuate a cure for such asserted “Good Reason” by Executive. Executive’s resignation hereunder for Good Reason shall not occur later than
six (6) months following the initial date on which the event Executive claims constitutes Good Reason occurred. 
  

 6 








 12. Termination in Connection with a Change in Control. 
  

	 	a.	For purposes of this Agreement, a “Change in Control” shall be deemed to occur on the earliest of: 

  

	 	(i)	Merger: The Company merges into or consolidates with another corporation, or merges another corporation into the Company, and as a result less than a majority of the combined
voting power of the resulting corporation immediately after the merger or consolidation is held by persons who were stockholders of the Company immediately before the merger or consolidation; 

  

	 	(ii)	Acquisition of Significant Share Ownership: a report on Schedule 13D or another form or schedule (other than Schedule 13G) is filed or is required to be filed under Sections
13(d) or 14(d) of the Securities Exchange Act of 1934, if the schedule discloses that the filing person or persons acting in concert has or have become the beneficial owner of 25% or more of a class of the Company’s voting securities, but this
clause (ii) shall not apply to beneficial ownership of Company voting shares held in a fiduciary capacity by an entity of which the Company directly or indirectly beneficially owns 50% or more of its outstanding voting securities;


  

	 	(iii)	Change in Board Composition: during any period of two consecutive years, individuals who constitute the Company’s Board of Directors at the beginning of the two-year
period cease for any reason to constitute at least a majority of the Company’s Board of Directors; provided, however, that for purposes of this clause (iii) each director who is first elected by the board (or first nominated by the board
for election by stockholders) by a vote of at least two-thirds of the directors who were directors at the beginning of the period shall be deemed to have been a director at the beginning of the two-year period; or 

  

	 	(iv)	Sale of Assets: Company sells to a third party all or substantially all of the Company’s assets. 

  

	 	b.	 Termination. If within the period ending two years after a Change in Control, (i) the Company and the Bank shall terminate the Executive’s employment
Without Cause, or (ii) Executive voluntarily terminates his employment With Good Reason, the Company and the Bank shall, within ten calendar days of the termination of Executive’s employment, make a lump-sum cash payment to him equal to
2.99 times the Executive’s average Annual Compensation over the five (5) most recently completed calendar years ending with the year immediately preceding the effective date of the Change in Control (or such lesser number of completed
calendar years as the Executive has been employed by the Company and the Bank). In determining Executive’s average Annual Compensation, Annual Compensation shall include base salary and any other taxable income, including but not limited to
amounts related to the granting, vesting or exercise of restricted stock or stock option awards, commissions, bonuses (whether paid or accrued for the applicable period), as well as, retirement benefits, director or committee fees and fringe
benefits paid or to be paid to Executive or paid for Executive’s benefit during any such year, profit sharing, employee stock ownership plan and other retirement contributions or benefits, including to any tax-qualified plan or arrangement
(whether or not taxable) made or accrued on behalf of Executive of such year. The cash payment made under this Section 12(b) shall be made in lieu of any payment also required under 



  

 7 









	 	 
Section 11(f) of this Agreement because of a termination in such period. Executive’s rights under Section 11(f) are not otherwise affected by
this Section 12. Also, in such event, the Executive shall, for a thirty-six (36) month period following his termination of employment, receive the benefits he would have received over such period under any retirement programs (whether
tax-qualified or nonqualified) in which the Executive participated prior to his termination (with the amount of the benefits determined by reference to the benefits received by the Executive or accrued on his behalf under such programs during the
twelve (12) months preceding the Change in Control) and continue to participate in any benefit plans of the Company and the Bank that provide health (including medical and dental), life, or similar coverage upon terms no less favorable than the
most favorable terms provided to senior executives during such period. In the event that the Company and the Bank are unable to provide such coverage by reason of the Executive no longer being an employee, the Company and the Bank shall provide the
Executive with comparable coverage on an individual policy. 


  

	 	c.	The provisions of Sections 12 and Sections 14 through 25, including the defined terms used is such sections, shall continue in effect until the later of the expiration of this
Agreement or two years following a Change in Control. 

 13. Indemnification and Liability Insurance. 

 

	 	a.	Indemnification. The Company and the Bank agree to indemnify Executive (and his heirs, executors, and administrators), and to advance expenses related thereto, to the fullest
extent permitted under applicable law and regulations against any and all expenses and liabilities reasonably incurred by him in connection with or arising out of any action, suit, or proceeding in which he may be involved by reason of his having
been a director or executive of the Company, the Bank or any of their subsidiaries (whether or not he continues to be a director or executive at the time of incurring any such expenses or liabilities) such expenses and liabilities to include, but
not be limited to, judgments, court costs, and attorneys’ fees and the cost of reasonable settlements, such settlements to be approved by the Board, if such action is brought against Executive in his capacity as an executive or director of the
Company and the Bank or any of their subsidiaries. Indemnification for expense shall not extend to matters for which the Executive has been terminated for Cause. Nothing contained herein shall be deemed to provide indemnification prohibited by
applicable law or regulation. Notwithstanding anything herein to the contrary, the obligations of this Section 13 shall survive the term of this Agreement by a period of six (6) years. 

  

	 	b.	Insurance. During the period in which indemnification of Executive is required under this Section, the Company and the Bank shall provide the Executive (and his heirs,
executors, and administrators) with coverage under a directors’ and Executives’ liability policy at the expense of the Company and the Bank, at least equivalent to such coverage provided to directors and senior Executives of the Company
and the Bank. 

 14. Reimbursement of Executive’s Expenses to Enforce this Agreement. The Company and the
Bank shall reimburse the Executive for all out-of-pocket expenses, including, without limitation, reasonable attorneys’ fees, incurred by the Executive in connection with successful enforcement by the Executive of the obligations of the Company
and the Bank to the Executive under this Agreement. Successful enforcement shall mean the grant of an award of money or the requirement that the Company and the Bank take some action specified by this Agreement (i) as a result of court order;
or (ii) otherwise by the Company and the Bank following an initial failure of the Company and the Bank to pay such money or take such action promptly after written demand therefor from the Executive stating the reason that such money or action
was due under this Agreement at or prior to the time of such demand. 
  

 8 








 15. Limitation of Benefits under Certain Circumstances. If the payments and benefits
pursuant to Section 12 of this Agreement, either alone or together with other payments and benefits which the Executive has the right to receive from the Company and the Bank, would constitute a “parachute payment” under
Section 280G of the Code, the payments and benefits pursuant to Section 12 shall be reduced or revised, in the manner determined by the Executive, by the amount, if any, which is the minimum necessary to result in no portion of the
payments and benefits under Section 12 being non-deductible to the Company and the Bank pursuant to Section 280G of the Code and subject to the excise tax imposed under Section 4999 of the Code. The determination of any reduction in
the payments and benefits to be made pursuant to Section 12 shall be based upon the opinion of the Company and the Bank’s independent public accountants and paid for by the Company and the Bank. In the event that the Company, the Bank
and/or the Executive do not agree with the opinion of such counsel, (i) the Company and the Bank shall pay to the Executive the maximum amount of payments and benefits pursuant to Section 12, as selected by the Executive, which opinion
indicates there is a high probability of such payments and benefits being non-deductible to the Company and the Bank and subject to the imposition of the excise tax imposed under Section 4999 of the Code and (ii) the Company and the Bank
may request, and the Executive shall have the right to demand that they request, a ruling from the IRS as to whether the disputed payments and benefits pursuant to Section 12 have such consequences. Any such request for a ruling from the IRS
shall be promptly prepared and filed by the Company and the Bank, but in no event later than thirty (30) days from the date of the opinion of counsel referred to above, and shall be subject to the Executive’s approval prior to filing,
which shall not be unreasonably withheld. The Company, the Bank and the Executive agree to be bound by any ruling received from the IRS and to make appropriate payments to each other to reflect any such rulings, together with interest at the
applicable federal rate provided for in Section 7872(f)(2) of the Code. Nothing contained herein shall result in a reduction of any payments or benefits to which the Executive may be entitled upon termination of employment other than pursuant
to Section 12 hereof, or a reduction in the payments and benefits specified in Section 12 below zero. 
 16. Injunctive
Relief. If there is a breach or threatened breach of Section 10 of this Agreement, the parties agree that there is no adequate remedy at law for such breach, and that the Company and the Bank shall be entitled to injunctive relief
restraining the Executive from such breach or threatened breach, but such relief shall not be the exclusive remedy hereunder for such breach. The parties hereto likewise agree that the Executive, without limitation, shall be entitled to injunctive
relief to enforce the obligations of the Company and the Bank under this Agreement. 
 17. Successors and Assigns. 

 

	 	a.	This Agreement shall inure to the benefit of and be binding upon any corporate or other successor of the Company and the Bank which shall acquire, directly or indirectly, by merger,
consolidation, purchase or otherwise, all or substantially all of the assets or stock of the Company and the Bank. 

  

	 	b.	Since the Company and the Bank are contracting for the unique and personal skills of Executive, Executive shall be precluded from assigning or delegating his rights or duties
hereunder without first obtaining the written consent of the Company and the Bank. 

 18. No Mitigation.
Executive shall not be required to mitigate the amount of any payment provided for in this Agreement by seeking other employment or otherwise and no such payment shall be offset or reduced by the amount of any compensation or benefits provided
to Executive in any subsequent employment. 
  

 9 








 19. Notices. All notices, requests, demands and other communications in connection with
this Agreement shall be made in writing and shall be deemed to have been given when delivered by hand or 48 hours after mailing at any general or branch United States Post Office, by registered or certified mail, postage prepaid, addressed to the
Company and/or the Bank at their principal business offices and to Executive at his home address as maintained in the records of the Company and the Bank. 
 20. No Plan Created by this Agreement. Executive, the Company and the Bank expressly declare and agree that this Agreement was negotiated among them and that no provision or provisions of this Agreement
are intended to, or shall be deemed to, create any plan for purposes of the Employee Retirement Income Security Act or any other law or regulation, and each party expressly waives any right to assert the contrary. Any assertion in any judicial or
administrative filing, hearing, or process that such a plan was so created by this Agreement shall be deemed a material breach of this Agreement by the party making such an assertion. 
 21. Amendments. No amendments or additions to this Agreement shall be binding unless made in writing and signed by all of the parties,
except as herein otherwise specifically provided. 
 22. Applicable Law. Except to the extent preempted by Federal law, the
laws of the State of Tennessee shall govern this Agreement in all respects, whether as to its validity, construction, capacity, performance or otherwise. 
 23. 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. 
 24. Headings. Headings contained herein are for convenience of reference only. 
 25. Entire Agreement. This Agreement, together with any understanding or modifications thereof as agreed to in writing by the parties,
shall constitute the entire agreement among the parties hereto with respect to the subject matter hereof, other than written agreements with respect to specific plans, programs or arrangements described in Sections 5 and 6. The parties agree that
this Agreement supercedes and replaces in its entirety the Agreement between the Executive, the Bank and the Company dated June 25, 2003. 
 26. Required Provisions. In the event any of the provisions of this Section 26 are in conflict with the terms of this Agreement, this Section 26 shall prevail. 
  

	 	a.	The Bank may terminate Executive’s employment at any time, but any termination by the Bank, other than Termination for Cause, shall not prejudice Executive’s right to
compensation or other benefits under this Agreement. Executive shall not have the right to receive compensation or other benefits for any period after Termination for Cause as defined in Section 7 hereinabove. 

  

	 	b.	 If Executive is suspended from office and/or temporarily prohibited from participating in the conduct of the Bank’s affairs by a notice served under
Section 8(e)(3) or 8(g)(1) of the Federal Deposit Insurance Act, 12 U.S.C. §1818(e)(3) or (g)(1); the Bank’s obligations under this contract shall be suspended as of the date of service, unless stayed by appropriate proceedings. If
the charges in the notice are dismissed, the Bank may in 



  

 10 









	 	 
its discretion: (i) pay Executive all or part of the compensation withheld while their contract obligations were suspended; and (ii) reinstate (in
whole or in part) any of the obligations which were suspended. 


  

	 	c.	If Executive is removed and/or permanently prohibited from participating in the conduct of the Bank’s affairs by an order issued under Section 8(e)(4) or 8(g)(1) of the
Federal Deposit Insurance Act, 12 U.S.C. §1818(e)(4) or (g)(1), all obligations of the Bank under this contract shall terminate as of the effective date of the order, but vested rights of the contracting parties shall not be affected.


  

	 	d.	If the Bank is in default as defined in Section 3(x)(1) of the Federal Deposit Insurance Act, 12 U.S.C. §1813(x)(1) all obligations of the Bank under this contract shall
terminate as of the date of default, but this paragraph shall not affect any vested rights of the contracting parties. 

  

	 	e.	All obligations of the Bank under this contract shall be terminated, except to the extent determined that continuation of the contract is necessary for the continued operation of
the institution: (i) by the Director of the OTS (or his designee), the FDIC or the Resolution Trust Corporation, at the time the FDIC enters into an agreement to provide assistance to or on behalf of the Bank under the authority contained in
Section 13(c) of the Federal Deposit Insurance Act, 12 U.S.C. §1823(c); or (ii) by the Director of the OTS (or his designee) at the time the Director (or his designee) approves a supervisory merger to resolve problems related to the
operations of the Bank or when the Bank 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. 

  

	 	f.	Any payments made to Executive pursuant to this Agreement, or otherwise, are subject to and conditioned upon compliance with 12 U.S.C. §1828(k) and 12 C.F.R.
Section 545.121 and any rules and regulations promulgated thereunder. 

 27. Section 409A of the Code. 

  

	 	a.	This Agreement is intended to comply with the requirements of Section 409A of the Code, and specifically, with the “short-term deferral exception” under Treasury
Regulation Section 1.409A-1(b)(4) and the “separation pay exception” under Treasury Regulation Section 1.409A-1(b)(9)(iii), and shall in all respects be administered in accordance with Section 409A of the Code. If any
payment or benefit hereunder cannot be provided or made at the time specified herein without incurring sanctions on Executive under Section 409A of the Code, then such payment or benefit shall be provided in full at the earliest time thereafter
when such sanctions will not be imposed. For purposes of Section 409A of the Code, all payments to be made upon a termination of employment under this Agreement may only be made upon a “separation from service” (within the meaning of
such term under Section 409A of the Code), each payment made under this Agreement shall be treated as a separate payment, the right to a series of installment payments under this Agreement (if any) is to be treated as a right to a series of
separate payments, and if a payment is not made by the designated payment date under this Agreement, the payment shall be made by December 31 of the calendar year in which the designated date occurs. To the extent that any payment provided for
hereunder would be subject to additional tax under Section 409A of the Code, or would cause the administration of this Agreement to fail to satisfy the requirements of Section 409A of the Code, such provision shall be deemed null and void
to the extent permitted by applicable law, and any such amount shall be payable in accordance with b. below. In no event shall Executive, directly or indirectly, designate the calendar year of payment. 

  

 11 









	 	b.	Notwithstanding anything herein to the contrary, if Executive is a “specified employee” (within the meaning of Section 409A of the Code) and it is necessary to
postpone the commencement of any payments or benefits otherwise payable under this Agreement as a result of Executive’ separation from service with the Bank to prevent any accelerated or additional tax under Section 409A of the Code, then
the Bank will postpone the commencement of the payment of any such payments or benefits hereunder (without any reduction in such payments or benefits ultimately paid or provided to Executive) that are not otherwise paid with the “short-term
deferral exception” under Treasury Regulations Section 1.409A-1(b)(4) and the “separation pay exception” under Treasury Regulations Section 1.409A-1(b)(9)(iii), until the first payroll date that occurs after the date that is
six months following Executive’s separation of service with the Bank. If any payments are postponed due to such requirements, such postponed amounts will be paid to Executive in a lump sum on the first payroll date that occurs after the date
that is six months following Executive’s separation of service with the Bank. If Executive dies during the postponement period prior to the payment of postponed amount, the amounts withheld on account of Section 409(A) of the Code shall be
paid to the personal representative of Executive’s estate within sixty (60) days after the date of Executive’s death. 

  

 12 








 IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the date first set forth
above. 
  

							
	Attest:	 		 	JEFFERSON BANCSHARES, INC.
				
	 /s/ Jack E. Campbell
	 		 	By:	 	 /s/ John F. McCrary, Jr.

		 		 		 	Chairman of the Board of Directors
			
	Attest:	 		 	JEFFERSON FEDERAL BANK
				
	 /s/ Jack E. Campbell
	 		 	By:	 	 /s/ John F. McCrary, Jr.

		 		 		 	Chairman of the Board of Directors
			
	Witness:	 		 	EXECUTIVE
			
	 /s/ Jack E. Campbell
	 		 	 /s/ Anderson L. Smith

		 		 	Anderson L. Smith

  

 13