**EXHIBIT 10.7**

**EMPLOYEE AGREEMENT**

**AGREEMENT,** entered into as of the 28th day of December,2007, to become effective January 1, 2008, between First Citizens National Bankand First Citizens Bancshares, Inc. (collectively "Employer"), andStallings Lipford (Executive). This Agreement revokes all prior employment agreementsbetween Employer and Executive as of December 31, 2007, including, withoutlimitation prior Executive Employment Agreements dated as of the 21st dayof April, 1993, and the 2nd day of April, 1997 between Employer and Executive.

-  **Employment.**
The Employer agrees to continue to employ the Executive,  and the Executive agrees to continue to serve and be employed by the Employer  on the terms and conditions set forth herein.
-  **Term of Employment.**
On December 31, 2007 and on the last day of each year  thereafter, the Term of the Executive's employment shall be automatically  extended for an additional year, unless at least ninety (90) days before the  end of the year either party shall have delivered to the other party written  notice of termination. This period of time is the "Term of Employment."
-  **Compensation.**-  Base Salary. As compensation for services rendered    by Executive during the period of employment hereunder, Employer shall pay    Executive a base annual salary of One Hundred Fifteen Thousand Four Hundred    Sixty-one Dollars and Fourteen Cents ($115,461.14), less income tax    withholdings and other customary employee deductions, (Base Salary), with    additional compensation in the amount of $3,613.90 payable directly to    Continental Casualty Company for premiums on Long Term Care Insurance.    Should the amount of future annual premiums on Long Term Care Insurance    increase or decrease, the resulting Base Salary shall be adjusted    accordingly. The Base Salary shall be payable in twenty-four (24) equal    installments each year on the first (1st) and fifteenth (15th) day of each    calendar month.Benefits. Employer shall also provide limited    benefits consisting of the ESOP or any successor plan, and the 401(k) plan.    In addition, Employer shall pay directly or reimburse Executive for payment    of premiums for Medicare Supplemental Insurance in an amount approved by the    Employer's Compensation Committee.Incentive Compensation.****Executive's Base    annual salary shall represent total compensation and shall not include    participation in Incentive Compensation Plan offered other full-time    officers employed by First Citizens National Bank.-  **Duties.**
During the term of employment, Executive shall serve as  Chairman Emeritus of the Company or in such other position and with  responsibilities as the Board of Directors of the Company may from time to  time assign. Executive shall render to Employer such services of an advisory  or consultative nature as Employer may reasonable request in order that  Employer may continue to have benefit of Executive's experience and knowledge  of the banking industry and his influence in the Dyersburg community.  Executive shall also serve as a member of the Board of Directors of First  Citizens Bancshares, Inc. for such term(s) as he may be elected by  Shareholders, and on the Board of Directors of First Citizens National Bank  for one year terms as appointed by the Board of Directors of First Citizens  Bancshares, Inc.
-  **Working Facilities.**
Employer shall provide Executive appropriate furnished  office space within the Corporate Office facility located at One First Citizens Place,  Dyersburg, Tennessee. Executive shall be provided clerical support sufficient to  accomplish duties as assigned herein.
-  **Expenses.**
Employer shall reimburse Executive all reasonable and  customary expenses incurred by Executive in the performance of duties  hereunder upon Executive's submission to Employer of customary documentation  and receipts. 
-  **Termination.**
Notwithstanding the Term of this Agreement established in  Section 2 above, this Agreement is subject to earlier termination (i) if Executive  should sooner die, whereupon this Agreement shall immediately terminate, or (ii) by the Executive if the Employer commits a material  breach of its obligations under this Agreement and does not remedy such breach  within thirty (30) days after receiving written notice specifying the nature  of such breach, or (iii) by the Employer for cause as a result of one or more  of the following reasons:
-  Any one or more of the following: acts of theft,      embezzlement, fraud or dishonesty, knowing violation of the law, acts      involving moral turpitude, or dereliction in the performance of his      duties, as determined by Employer's Board in its sole and absolute      discretion, but in the exercise of its good faith judgment; or if      Executive is incapacitated for a period of 6 months;For failure of the Executive to perform his duties      and responsibilities in accordance with terms and conditions of this      Agreement other than described in Item 4 herein;At the option of the Executive, should he elect to      retire from his arrangement with Employer and thereby terminate this      Agreement during the term hereof;Compensation payable to Executive under terms of this      Agreement shall cease at the end of any month following termination of      employment by Executive or Employer as set forth in Item 7(a), 7(b) or      7(c) herein.-  **Life Insurance.**
Employer shall provide a  benefit in the form of permanent life insurance coverage using an Amended and  Restated Split Dollar Agreement for Executive in the amount of Three Hundred  Fifty Thousand Dollars ($350,000). Termination of this Agreement for any  reason, either by Executive or Employer, shall in no manner reduce or  eliminate the life insurance benefits provided under this arrangement.
-  **Entire Agreement.**
This Agreement contains the entire understanding of the  parties with respect to the subject matter contained herein. It may not be  changed orally but only by an agreement in writing signed by the party against  whom enforcement of any waiver, change, modification, extension, or discharge  is sought.
-  **Successors: Binding Agreement.**Employer shall require any successor (whether direct or indirect, by  purchase, merger, consolidation or otherwise) to all or substantially all of  the business and/or assets of the Employer to expressly assume and agree to  perform this Agreement in the same manner and to the same extent that Employer  would be required to perform if no such succession had taken place. **Governing Law.**This Agreement shall be construed and enforced in accordance with the  laws of the State of Tennessee.
**IN WITNESSWHEREOF**, the parties hereto have executed this Agreement as of the date andyear above written.

 

**EMPLOYER:**

FIRST CITIZENSNATIONAL BANK

 

By:           /s/ Jeffrey D. Agee                                      Jeffrey D. Agee, President & CEO 

**EXECUTIVE:**

                  /s/Stallings Lipford                                Stallings Lipford, Chairman Emeritus