<PAGE>

                             EMPLOYMENT AGREEMENT


     THIS EMPLOYMENT AGREEMENT ("Agreement") is made and entered into as of
this 7th day of February, 1997, by and between FORREST CITY BANK, NA, 715
North Washington, Forrest City, Arkansas (hereinafter referred to as the
"Bank"), and Frankie L. Pratt (the "Employee").

     WHEREAS, the Employee has been employed as Executive Vice President.

     WHEREAS, the Board of Directors of the Bank recognizes that, as is the
case with publicly held corporations generally, the possibility of a change in
control of Forrest City Financial Corporation (the "Holding Company") and/or
the bank may exist and that such possibility, and the uncertainty and
questions which it may raise among management, may result in the departure or
distraction of key management personnel to the detriment of the Bank, the
Holding Company and its stockholder; and

     WHEREAS, the Board of Directors of the Bank believes it is in the best
interest of the Bank to enter into this Agreement with the Employee in order
to assure continuity of management of the Bank and to reinforce and encourage
the continued attention and dedication of the Employee to his assigned duties
without distraction in the face of potentially disruptive circumstances
arising from the possibility of a change in control of the Holding Company,
although no such change is now contemplated; and

     WHEREAS, the Board of Directors of the Bank has approved and authorized
the execution of this Agreement with the Employee to take effect as stated in
Section 4 hereof;

     NOW THEREFORE, in consideration of the foregoing and of the respective
covenants and agreements of the parties herein contained, it is AGREED as
follows:

     1. Employment. The Employee is employed as the Executive Vice President
of the Bank. As Executive Vice President, Employee shall render administrative
and management services as are customarily performed by persons situated in
similar executive capacities, and shall have other powers and duties as may
from time to time be prescribed by the Board, provided that such duties are
consistent with the Employee's position as Executive Vice President. The
Employee shall continue to devote his best efforts and substantially all his
business time and attention to the business and affairs of the Bank and its
subsidiaries and affiliated companies.

     2.  Compensation.

         a. Salary. The Bank agrees to pay the Employee during the term of
this Agreement a salary established by the Board of Directors. The salary
hereunder as of the Commencement Date (as defined in Section 4 hereof) shall
be $65,000 per year. The Employee's salary shall be payable not less
frequently than monthly and not later than the tenth day following the
expiration of the month in question. The amount of the Employee's salary shall
be reviewed by the Board of Directors not less often than annually, beginning
not later than the date one year after the Commencement Date (as defined in
Section 4 hereof). Any adjustments in salary or other compensation shall in no
way limit or reduce any other obligation of the Bank hereunder. The Employee's
salary in effect hereunder from time to time shall not thereafter be reduced.

         b. Discretionary Bonuses. The Employee shall be entitled to
participate in an equitable manner with all other executive officers of the
Bank in discretionary bonuses as authorized and declared by the Board of
Directors of the Bank to its executive employees. No other compensation
provided for in this Agreement shall be deemed a substitute for the Employee's
right to participate in such bonuses when and as declared by the Board of
Directors.


<PAGE>

         c. Expenses. During the term of his employment hereunder, the
Employee shall be entitled to receive prompt reimbursement for all reasonable
expenses incurred by him (in accordance with policies and procedures at least
as favorable to the Employee as those presently applicable to the senior
executive officers of the Bank) in performing services hereunder, provided
that the Employee properly accounts therefor in accordance with Bank policy.

     3.  Benefits.

         (a) Participation in Retirement and Employee Benefit Plans. The
Employee shall be entitled while employed hereunder to participate in, and
receive benefits under, all plans relating to pension, thrift, profit-sharing,
group life insurance, medical coverage, education, cash bonuses, and other
retirement or employee benefits or combinations thereof, that are maintained
for the benefit of the Bank's executive employees or for its employees
generally.

         (b) Fringe Benefits. The Employee shall be eligible while employed
hereunder to participate in, and receive benefits under, any other fringe
benefit plans which are or may become applicable to the Bank's executive
employees or to its employees generally.

         (c) Term. The term of employment under this Agreement shall be a
period of three years. Beginning on the first anniversary of the Commencement
Date, and on each anniversary thereafter, the term of employment under this
Agreement shall be extended for a period of one year in addition to the then-
remaining term of employment under this Agreement, unless either the Bank or
the Employee gives contrary written notice to the other not less than 90 days
in advance of the date on which the term of employment under this Agreement
would otherwise be extended, provided that such term will not be automatically
extended unless, prior thereto, the Board of Directors of the Bank reviews a
formal performance evaluation of the Employee performed by disinterested
members of the Board of Directors of the Bank and reflected in the minutes of
the Board of Directors. Reference herein to the term of employment under this
Agreement shall refer to both such initial term and such extended terms.

     5. Vacations. The Employee shall be entitled, without loss of pay, to
absent himself voluntarily from the performance of his employment under this
Agreement, all such voluntary absences to count as vacation time, provided
that:

         (a) the Employee shall be entitled to an annual vacation of not less
than two (2) weeks per year;

         (b) the timing of vacations shall be scheduled in a reasonable manner
by the Employer; and

         (c) solely at the Employee's request, the Board of Directors shall be
entitled to grant to the Employee a leave or leaves of absence with or without
pay at such time or times and upon such terms and conditions as the Board, in
its discretion, may determine.

     6.  Termination of Employment; Death.

         (a) The Bank's Board of Directors may terminate the Employee's
employment at any time, but any termination by the Bank's Board of Directors
other than termination for cause, shall not prejudice the Employee's right to
compensation or other benefits under this Agreement. If the employment of the
Employee is involuntarily terminated, other than for "cause" as provided in
this Section 6(a) or pursuant to any of Sections 6(d) through 6(g), or by
reason of death or disability as provided in Sections 6(c) or 7, the Employee
shall be entitled to (i) his then applicable salary for the then-remaining
term of the Agreement as calculated in accordance with Section 4 hereof,
payable in such manner and at such times as such salary would have been
payable to the Employee under Section 2 had he remained in the employ of the
Bank, and (ii) health insurance benefits as maintained by the Bank for the
benefit of its senior 


<PAGE>

executive employees or its employees generally over the then-remaining term of
the Agreement as calculated in accordance with Section 4 hereof.

     The terms "termination" or "involuntarily terminated" in this Agreement
shall refer to the termination of the employment of Employee without his
express written consent. In addition, a material diminution of or interference
with the Employee's duties, responsibilities and benefits as Executive Vice
President of the Bank shall be deemed and shall constitute an involuntary
termination of employment to the same extent as express notice of such
involuntary termination. Any of the following actions shall constitute such
diminution or interference unless consented to in writing by the Employee: (1)
a change in the principal workplace of the Employee to a location outside of a
30 mile radius from the Bank's headquarters office as of the date hereof; (2)
a material demotion of the Employee, a material reduction in the number of
seniority of other Bank personnel reporting to the Employee, or a material
reduction in the frequency with which, or in the nature of the matters with
respect to which, such personnel are to report to the Employee, other than as
part of a Bank or Holding Company-wide reduction in staff; (3) a reduction or
adverse change int he salary, perquisites, benefits, contingent benefits or
vacation time which had theretofore been provided to the Employee, other than
as part of an overall program applied uniformly and with equitable effect to
all members of the senior management of the Bank or the Holding Company; and
(4) material increase in the required hours of work or the workload of the
Employee.

         In case of termination of the Employee's employment for cause, the
Bank shall pay the Employee his salary through the date of termination, and
the Bank shall have no further obligation to the Employee under this
Agreement. For purposes of this Agreement, termination for "cause" shall
include termination for personal dishonesty, incompetence, willful misconduct,
breach of a fiduciary duty involving personal profit, intentional failure to
perform stated duties, willful violation of any law, rule, or regulation
(other than traffic violations or similar offenses) or final cease-and-desist
order, or material breach of any provision of this Agreement. Notwithstanding
the foregoing, the Employee shall not be deemed to have been terminated for
cause unless and until there shall have been delivered to the Employee a copy
of a resolution, duly adopted by the affirmative vote of not less than a
majority of the entire membership of the Board of Directors of the Bank at a
meeting of the Board called and held for such purpose (after reasonable notice
to the Employee and an opportunity for the Employee, together with the
Employee's counsel, to be heard before the Board), stating that in the good
faith opinion of the Board the Employee as guilty of conduct constituting
"cause" as set forth above and specifying the particulars thereof in detail.

         (b) The Employee's employment may be voluntarily terminated by the
Employee at any time upon 90 days written notice to the Bank or upon such
shorter period as may be agreed upon between the Employee and the Board of
Directors of the Bank. In the event of such voluntary termination, the Bank
shall be obligated to continue to pay the Employee his salary and benefits
only through the date of termination, at the time such payments are due, and
the Bank shall have no further obligation to the Employee under this
Agreement.

         (c) In the event of the death of the Employee during the term of
employment under this Agreement and prior to any termination hereunder, the
Employee's estate, or such person as the Employee may have previously
designated in writing, shall be entitled to receive from the Bank the salary
of the Employee through the last day of the calendar month in which is death
shall have occurred, and the term of employment under this Agreement shall end
on such last day of the month.

         (d) If the Employee is suspended and/or temporarily prohibited from
participating in the conduct of the Bank's affairs by a notice served under
Section 8(e)(3) or (g)(1) of the Federal Deposit Insurance Act ("FDIA"), 12
U.S.C. ss. 1818(e)(3) and (g)(1), the Bank's obligations under this Agreement
shall be suspended as of the date of service, unless stayed by appropriate
proceedings.


<PAGE>

If the charges in the notice are dismissed, the Bank may in its discretion (i)
pay the Employee all or part of the compensation withheld while its
obligations under this Agreement were suspended and (ii) reinstate in whole or
in part any of its obligations which were suspended.

         (e) If the Employee 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 FDIA, 12 U.S.C. ss. 1818(e)(4) and (g)(1),
all obligations of the Bank under this Agreement shall terminate as of the
effective date of the order, but vested rights of the contracting parties
shall not be affected.

         (f) If the Bank is in default (as defined in Section 3(x)(1) of the
FDIA), all obligations under this Agreement shall terminate as of the date of
default, but this provision shall not affect any vested rights of the
contracting parties.

         (g) All obligations under this Agreement shall be terminated, except
to the extent determined that continuation of this Agreement is necessary for
the continued operation of the Bank: (i) by the Director of the Office of the
Comptroller of the Currency (the "Director") or his or her designee, at the
time the Federal Deposit Insurance Corporation ("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 FDIA; or (ii) by the Director or
his or her designee, at the time the Director or his or her designee approves
a supervisory merger to resolve problems related to operation of the Bank or
when the Bank 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 any such action.

         (h) In the event the Bank purports to terminate the Employee for
cause, but it is determined by a court of competent jurisdiction or by an
arbitrator pursuant to Section 17 that cause did not exist for such
termination, or if in any event it is determined by an such court or
arbitrator that the Bank has failed to make timely payment of any amounts owed
to the Employee under this Agreement, the Employee shall be entitled to
reimbursement for all reasonable costs, including attorney's fees, incurred in
challenging such termination or collecting such amounts. Such reimbursement
shall be in addition to all rights to which the Employee is otherwise entitled
under this Agreement.

     7. Disability. If the Employee shall become disabled as defined in the
Bank's then current disability plan or if the Employee shall be otherwise
unable to serve as Executive Vice President, the Employee shall be entitled to
receive group and other disability income benefits of the type then provided
by the Bank for other executive employees.

     8.  Change in Control.

         (a) Involuntary Termination. If the Employee's employment is
voluntarily terminated (other than for cause or pursuant to any of Sections
6(c) through 6(g) or Section 7 of this Agreement) in connection with or within
12 months after a change in control which occurs at any time during the term
of employment under this Agreement, in addition to its obligations under
Section 6(a) of this Agreement, the Bank shall pay to the Employee in a lump
sum in cash within 25 business days after the Date of Termination (as
hereinafter defined) of employment an amount equal to 299% of the Employee's
"base amount" of compensation as defined in Section 280G of the Internal
Revenue Code of 1986, as amended (the "Code"), subject to reduction under
Section 9 of this Agreement.

         (b) Definitions. For purposes of Section 8, 9 and 11 of this
Agreement, "Date of Termination" means the earlier of (i) the date upon which
the Bank gives notice to the Employee of the termination of his employment
with the Bank or (ii) the date upon which the Employee ceases to serve as an
Employee of the Bank and "change in control" is defined solely as any
acquisition of control (by a trustee or other fiduciary holding securities
under an employee benefit 


<PAGE>

plan of the Holding Company or a subsidiary of the Holding Company), as
defined in 12 C.F.R. ss. 574.4, or any successor regulation, of the Bank or
Holding Company which would require the filing of an application for
acquisition of control or notice of change in control in a manner as set forth
in 12 C.F.R. ss. 574.3, or any successor regulation.

     9.  Certain Reduction of Payments by the Bank

         (a) Anything in this Agreement to the contrary notwithstanding, in
the event it shall be determined that any payment or distribution by the Bank
to or for the benefit of the Employee (whether paid or payable or distributed
or distributable pursuant to the terms of this Agreement or otherwise) (a
"Payment") would be nondeductible (in whole or in part) by the Bank for
Federal income tax purposes because of Section 280G of the Code, then the
aggregate present value of amounts payable or distributable to or for the
benefit of the Employee pursuant to this Agreement (such amounts payable or
distributable pursuant to this Agreement are hereinafter referred to as
"Agreement Payments") shall be reduced to the Reduced Amount. The "Reduced
Amount" shall be an amount, not less than zero, expressed in present value
which maximizes the aggregate present value of Agreement Payments without
causing any Payment to be nondeductible by the Bank because of Section 280G of
the Code. For purposes of this Section 9, present value shall be determined in
accordance with Section 280G(d)(4) of the Code.

         (b) All determinations required to be made under this Section 9 shall
be made by the Bank's independent auditors, or at the election of such
auditors by such other firm or individuals of recognized expertise as such
auditors may select (such auditors or, if applicable, such other firm or
individual, are hereinafter referred to as the "Advisory Firm"). The Advisory
Firm shall within ten business days of the Date of Termination, or at such
earlier time as is requested by the Bank, provide to both the Bank and the
Employee an opinion (and detailed supporting calculations) that the Bank has
substantial authority to deduct for federal income tax purposes the full
amount of the Agreement Payments and that the Employee has substantial
authority not to report on his federal income tax return any excise tax
imposed by Section 4999 of the Code with respect to the Agreement Payments.
Any such determination and opinion by the Advisory Firm shall be binding upon
the Bank and the Employee. The Employee shall determine which and how much, if
any, of the Agreement Payments shall be eliminated or reduced consistent with
the requirements of this Section 9, provided that, if the Employee does not
make such determination within ten business days of the receipt of the
calculations made by the Advisory Firm, the Bank shall elect which and how
much, if any, of the Agreement Payments shall be eliminated or reduced
consistent with the requirements of this Section 9 and shall notify the
Employee promptly of such election. Within five business days of the earlier
of (i) the Bank's receipt of the Employee's determination pursuant to the
immediately preceding sentence of this Agreement or (ii) the Bank's election
in lieu of such determination, the Bank shall pay to or distribute to or for
the benefit of the Employee such amounts as are then due the Employee under
this Agreement. The Bank and the Employee shall cooperate fully with the
Advisory Firm, including without limitation providing to the Advisory Firm all
information and materials reasonably requested by it, in connection with the
making of the determinations required under this Section 9.

         (c) As a result of uncertainty in application of Section 280G of the
Code at the time of the initial determination by the Advisory Firm hereunder,
it is possible that Agreement Payments will have been made by the Bank which
should not have been made ("Overpayment") or that additional Agreement
Payments will not have been made by the Bank which should have been made
("Underpayment"), in each case, consistent with the calculations required to
be made hereunder. In the event that the Advisory Firm, based upon the
assertion by the Internal Revenue Service against the Employee of a deficiency
which the Advisory Firm believes has a high probability of success determines
that an Overpayment has been made, any such Overpayment paid or distributed by
the Bank to or for the benefit of Employee shall be treated for all purposes
as a loan ab initio which the Employee shall repay to the Bank together with
interest at the applicable federal rate 


<PAGE>

provided for in Section 7872(f)(2) of the Code; provided, however, that no
such loan shall be deemed to have been made and no amount shall be payable by
the Employee to the Bank if and to the extent such deemed loan and payment
would not either reduce the amount on which the Employee is subject to tax
under Section 1 and Section 4999 of the Code or generate a refund of such
taxes. In the event that the Advisory Firm, based upon controlling precedent
or other substantial authority, determines that an Underpayment has occurred,
any such Underpayments shall be promptly paid by the Bank to or for the
benefit of the Employee together with interest at the applicable federal rate
provided for in Section 7872(f)(2) of the Code.

         (d) The total of payments to the Employee under Section 6(a) and
Section 8(a) shall not exceed three times his average compensation from the
Bank over the five most recent taxable years (or, if employed by the Bank for
a shorter period, over the period of his employment by the Bank).

         (e) Any payments made to the Employee pursuant to this Agreement, or
otherwise, are subject to and conditioned upon their compliance with 12 U.S.C.
1828(k) and any regulations promulgated thereunder.

     10. No Mitigation. The Employee shall not be required to mitigate the
amount of any salary or other payment or benefit provided for in this
Agreement by seeking other employment or otherwise, nor shall the amount of
any payment or benefit provided for in this Agreement be reduced by any
compensation earned by the Employee as the result of employment by another
employer, by retirement benefits after the date of termination or otherwise.

     11.  No Assignments.

         (a) This Agreement is personal to each of the parties hereto, and
neither party may assign or delegate any of its rights or obligations
hereunder without first obtaining the written consent of the other party;
provided, however, that the Bank will require any successor or assign (whether
direct or indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Bank, by an assumption
agreement in form and substance satisfactory to the Employee, to expressly
assume and agree to perform this Agreement in the same manner and to the same
extent that the Bank would be required to perform it if no such succession or
assignment had taken place. Failure of the Bank to obtain such an assumption
agreement prior to the effectiveness of any such succession or assignment
shall be a breach of this Agreement and shall entitle the Employee to
compensation from the Bank in the same amount and on the same terms as the
compensation pursuant to Section 8(a) hereof. For purposes of implementing the
provisions of this Section 11(a), the date on which any such succession
becomes effective shall be deemed the Date of Termination.

        (b) This Agreement and all rights of the Employee hereunder shall
insure to the benefit of and be enforceable by the Employee's personal and
legal representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees. If the Employee should die while any
amounts would still be payable to the Employee hereunder if the Employee had
continued to live, all such amounts unless otherwise provided herein, shall be
paid in accordance with the terms of this Agreement to the Employee's devisee,
legatee or other designee or if there is no such designee, to the Employee's
estate.

     12. Notice. For the purposes of this Agreement, notices and all other
communications provided for in the Agreement shall be in writing and shall be
deemed to have been duly given when personally delivered or sent by certified
mail, return receipt requested, postage prepaid. All notices to the Bank shall
be sent to its home office, directed to the attention of the Board of
Directors of the Bank, with a copy to the Secretary of the Bank. All notices
to the Employee shall be sent to the home or other address he has most
recently provided in writing to the Bank.



<PAGE>


     13. Amendments. No amendments or additions to this Agreement shall be
binding unless in writing and signed by both parties, except as herein
otherwise provided. The parties hereto agree to amend this Agreement to comply
with any required provisions of 12 C.F.R. ss. 563.39(b), as the same may be
amended.

     14. Paragraph Headings. The paragraph headings used in this Agreement are
included solely for convenience and shall not affect, or be used in connection
with, the interpretation of this Agreement.

     15. 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.

     16. Governing Law. This Agreement shall be governed by the laws of the
United States to the extent applicable and otherwise by the laws of the State
of Arkansas.

     17. Arbitration. Any dispute or controversy arising under or in
connection with this Agreement shall be settled exclusively by arbitration in
accordance with the rules of the American Arbitration Association then in
effect. Judgment may be entered on the arbitrator's award in any court having
jurisdiction.

     IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.

THIS AGREEMENT CONTAINS A BINDING ARBITRATION PROVISION WHICH MAY BE ENFORCED
BY THE PARTIES.

                                             FORREST CITY BANK, NA



                                             BY:/s/ Ted C. Parker
                                                --------------------------
                                                Ted C. Parker, Chairman



                                             EMPLOYEE:



                                             /s/ Frankie L. Pratt
                                                --------------------------
                                                 Frankie L. Pratt