Document:

EMPLOYMENT AGREEMENT
                              --------------------

     THIS  AGREEMENT  is entered into this 17th day of  February,  2000,  by and
between  HCB  Bancshares,   Inc.  (the  "Company")  and  Vida  H.  Lampkin  (the
"Employee"),  effective  on the date (the  "Effective  Date") this  agreement is
executed.

     WHEREAS,  the Employee has heretofore been employed by HEARTLAND  Community
Bank (the "Bank") as its Chairman of the Board,  is experienced in all phases of
the  business  of the Bank,  and has  become  the  Chairman  of the Board of the
Company; and

     WHEREAS, the Board of Directors (the "Board") of the Company believes it is
in the best  interests  of the  Company  to enter into this  Agreement  with the
Employee  in  order  to  assure  continuity  of  management  of the Bank and the
Company,  and to reinforce and encourage the continued  attention and dedication
of the Employee to her assigned duties; and

     WHEREAS,  the parties  desire by this  writing to set forth the  continuing
employment relationship between the Company and the Employee.

     NOW, THEREFORE, it is AGREED as follows:

     1. Defined Terms

     When used anywhere in this  Agreement,  the following  terms shall have the
meaning set forth herein.

     (a)  "Affiliate"  shall  mean  any  "parent   corporation"  or  "subsidiary
corporation"  of the Bank,  as the terms are defined in Section  424(e) and (f),
respectively, of the Code.

     (b) A "Change in Control" shall be deemed to have occurred if:

                     (i)  as a result of, or in  connection  with,  any  initial
          public  offering,  tender  offer or  exchange  offer,  merger or other
          business  combination,  sale of  assets  or  contested  election,  any
          combination of the foregoing transactions, or any similar transaction,
          the persons who were non-employee directors of the Company or the Bank
          before such transaction cease to constitute a majority of the Board of
          Directors  of the Company or the Bank or any  successor to the Company
          or the Bank;

                    (ii) the Company or the Bank transfers  substantially all of
          its assets to another  corporation  which is not an  Affiliate  of the
          Company;

                    (iii) the Company sells  substantially  all of the assets an
         Affiliate  which  accounted for 50% or more of the  controlled  group's
         assets immediately prior to such sale;

                    (iv) any  "person"  including  a "group" is or  becomes  the
         "beneficial  owner",  directly  or  indirectly,  of  securities  of the
         Company or the Bank representing  twenty-five  percent (25%) or more of
         the  combined  voting  power of the  Company or the Bank's

<PAGE>
          outstanding  securities  (with the terms in quotation marks having the
          meaning set forth under the federal securities laws); or

                    (v) the Company or the Bank is merged or  consolidated  with
         another  corporation  and, as a result of the merger or  consolidation,
         less than seventy percent (70%) of the outstanding voting securities of
         the surviving or resulting corporation is owned in the aggregate by the
         former stockholders of the Company or the Bank.

         Notwithstanding  the  foregoing,  a "Change  in  Control"  shall not be
deemed to occur solely by reason of a transaction  in which the Bank converts to
the stock form of  organization,  or creates an independent  holding  company in
connection therewith.

         (c) "Code"  shall mean the Internal  Revenue  Code of 1986,  as amended
from time to time, and as interpreted through applicable rulings and regulations
in effect from time to time.

         (d)  "Code  Section 280G  Maximum"  shall  mean  product  of  2.99  and
the Employee's "base amount" as defined in Code Section 280G(b)(3).

         (e) "Good Reason" shall mean any of the following events, which has not
been  consented  to in advance by the Employee in writing:  (i) the  requirement
that  the  Employee  move her  personal  residence,  or  perform  her  principal
executive functions,  more than 30 miles from her primary office as of the later
of the Effective Date and the most recent voluntary  relocation by the Employee;
(ii) a  material  reduction  in the  Employee's  base  compensation  under  this
Agreement as the same may be increased  from time to time;  (iii) the failure by
the Bank or the Company to continue to provide the  Employee  with  compensation
and benefits  provided  under this  Agreement as the same may be increased  from
time to time, or with benefits  substantially  similar to those  provided to her
under any of the employee  benefit  plans in which the Employee now or hereafter
becomes a  participant,  or the taking of any action by the Bank or the  Company
which would  directly or  indirectly  reduce any of such benefits or deprive the
Employee of any material  fringe  benefit  enjoyed by her under this  Agreement;
(iv) the  assignment to the Employee of duties and  responsibilities  materially
different from those  normally  associated  with her position;  (v) a failure to
reelect the Employee to the Board of  Directors  of the Bank or the Company,  if
the  Employee  has  served  on such  Board  at any time  during  the term of the
Agreement;   (vi)  a  material   diminution  or  reduction  in  the   Employee's
responsibilities  or  authority   (including   reporting   responsibilities)  in
connection with her employment with the Bank or the Company; or (vii) a material
reduction in the secretarial or other administrative support of the Employee. In
addition, "Good Reason" shall mean an impairment of the Employee's health to the
extent that it makes continued  performance of her duties hereunder hazardous to
her physical or mental health.

         (f) "Just Cause"  shall mean,  in the good faith  determination  of the
Company's Board of Directors, the Employee's personal dishonesty,  incompetence,
willful  misconduct,   breach  of  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.
The Employee shall have no right to receive  compensation  or other benefits for
any period after  termination  for Just Cause. No act, or failure to act, on the
Employee's part shall be considered

                                      -2-
<PAGE>

"willful"  unless she has acted, or failed to act, with an absence of good faith
and  without a  reasonable  belief  that her action or failure to act was in the
best interest of the Bank and the Company.

         (h)  "Protected  Period"  shall mean the period that begins on the date
one year before the Change in Control and ends on the closing date of the Change
in Control.

         (h) "Trust"  shall mean a grantor  trust that is designed in accordance
with Revenue  Procedure 92-64 and has a trustee  independent of the Bank and the
Company.

         2. Employment. The Employee is employed as the Chairman of the Board of
            ----------
the  Company.  The  Employee  shall render such  administrative  and  management
services  for the  Company  as are  currently  rendered  and as are  customarily
performed  by persons  situated in a similar  executive  capacity.  The Employee
shall  also  promote,  by  entertainment  or  otherwise,  as and  to the  extent
permitted by law, the business of the Company. The Employee's other duties shall
be such as the Board may from time to time reasonably  direct,  including normal
duties as an officer of the Company.

         3. Consideration from Company: Joint and Several Liability.  In lieu of
            -------------------------------------------------------
paying the Employee a base salary during the term of this Agreement, the Company
hereby  agrees  that to the extent  permitted  by law,  it shall be jointly  and
severally  liable  with the Bank for the  payment of all  amounts  due under the
employment agreement between the Bank and the Employee.  Nevertheless, the Board
may in its discretion at any time during the term of this Agreement agree to pay
the  Employee a base salary for the  remaining  term of this  Agreement.  If the
Board agrees to pay such salary,  the Board shall  thereafter  review,  not less
often  than  annually,  the  rate  of the  Employee's  salary,  and in its  sole
discretion may decide to increase her salary.

         4.  Discretionary   Bonuses.  The  Employee  shall  participate  in  an
             -----------------------
equitable  manner with all other senior  management  employees of the Company in
discretionary  bonuses  that  the  Board  may  award  from  time  to time to the
Company's senior management  employees.  No other  compensation  provided for in
this  Agreement  shall  be  deemed  a  substitute  for the  Employee's  right to
participate  in  such  discretionary  bonuses.  Notwithstanding  the  foregoing,
following a Change in Control, the Employee shall receive  discretionary bonuses
that are made no less frequently than, and in amounts not less than, the average
annual  discretionary  bonuses  paid to the  Employee  during  each of the three
calendar  years  immediately  preceding the year in which such Change in Control
occurs.

         5. Participation in Retirement, Medical and Other Plans
            ----------------------------------------------------

         (a) During the term of this  Agreement,  the Employee shall be eligible
to  participate  in  the  following   benefit  plans:   group   hospitalization,
disability,  health, dental, sick leave, life insurance,  travel and/or accident
insurance, auto allowance/auto lease, retirement,  pension, and/or other present
or future  qualified  plans provided by the Company,  generally  which benefits,
taken  as a  whole,  must be at least as  favorable  as those in  effect  on the
Effective Date.

         (b) The  Employee  shall  be  eligible  to  participate  in any  fringe
benefits which are or may become  available to the Company's  senior  management
employees,  including  for example:

                                      -3-
<PAGE>

any stock option or incentive  compensation  plans, and any other benefits which
are commensurate with the  responsibilities and functions to be performed by the
Employee  under  this  Agreement.  The  Employee  shall  be  reimbursed  for all
reasonable  out-of-pocket  business expenses which she shall incur in connection
with her services under this Agreement upon  substantiation  of such expenses in
accordance with the policies of the Company.

         6. Term.  The Company  hereby  employs the  Employee,  and the Employee
            ----
hereby accepts such employment under this Agreement,  for the period  commencing
on the Effective  Date and ending 12 months  thereafter (or such earlier date as
is determined in accordance  with Section 9). Only those members of the Board of
Directors  who have no personal  interest  in this  Employment  Agreement  shall
discuss and vote on the approval and subsequent review of this Agreement.

         7. Loyalty; Noncompetition.
            -----------------------

         (a)  During  the  period of her  employment  hereunder  and  except for
illnesses,  reasonable vacation periods,  and reasonable leaves of absence,  the
Employee shall devote all her full business time, attention,  skill, and efforts
to the faithful  performance of her duties hereunder;  provided,  however,  from
time to time, the Employee 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 or any of its  subsidiaries or
affiliates,  or unfavorably  affect the  performance  of the  Employee's  duties
pursuant  to this  Agreement,  or will not  violate  any  applicable  statute or
regulation.  "Full  business  time" is  hereby  defined  as that  amount of time
usually  devoted to like  companies by similarly  situated  executive  officers.
During the term of her employment  under this Agreement,  the Employee shall not
engage in any business or activity contrary to the business affairs or interests
of the Company, or be gainfully employed in any other position or job other than
as provided above.

         (b) Nothing contained in this Paragraph 7 shall be deemed to prevent or
limit the Employee's right to invest in the capital stock or other securities of
any business  dissimilar  from that of the Company,  or,  solely as a passive or
minority investor, in any business.

         8.  Standards.  The  Employee  shall  perform  her  duties  under  this
             ---------
Agreement  in  accordance  with  such  reasonable  standards  as the  Board  may
establish from time to time. The Company will provide  Employee with the working
facilities and staff  customary for similar  executives and necessary for her to
perform her duties.

         9. Vacation and Sick Leave. At such reasonable times as the Board shall
            -----------------------
in its discretion permit,  the Employee shall be entitled,  without loss of pay,
to absent herself  voluntarily from the performance of her 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 in accordance
with the policies that the Board periodically  establishes for senior management
employees of the Company.

         (b) The Employee shall not receive any additional compensation from the
Company on account of her  failure  to take a vacation  or sick  leave,  and the
Employee shall not accumulate

                                      -4-
<PAGE>

unused  vacation from one fiscal year to the next,  except in either case to the
extent authorized by the Board.

     (c) In addition to the  aforesaid  paid  vacations,  the Employee  shall be
entitled,   without  loss  of  pay,  to  absent  herself  voluntarily  from  the
performance of her employment  with the Company 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 Employee a leave or
leaves of  absence,  with or  without  pay,  at such time or times and upon such
terms and conditions as such Board in its discretion may determine.

     (d) In  addition,  the  Employee  shall be entitled to an annual sick leave
benefit as established by the Board.

     10.  Termination and  Termination  Pay.  Subject to Section 12 hereof,  the
          ---------------------------------
Employee's   employment   hereunder  may  be  terminated   under  the  following
circumstances:

         (a)  Death.  The  Employee's  employment  under  this  Agreement  shall
terminate upon her death during the term of this  Agreement,  in which event the
Employee's estate shall be entitled to receive the compensation due the Employee
through the last day of the calendar month in which her death occurred.

         (b) Disability. (1) The Company may terminate the Employee's employment
after  having  established  the  Employee's  Disability.  For  purposes  of this
Agreement,  "Disability"  means a physical or mental infirmity which impairs the
Employee's ability to substantially  perform her duties under this Agreement and
which  results  in the  Employee  becoming  eligible  for  long-term  disability
benefits under the Company's  long-term  disability plan (or, if the Company has
no such plan in effect,  which impairs the Employee's  ability to  substantially
perform her duties under this Agreement for a period of 180  consecutive  days).
The Employee  shall be entitled to the  compensation  and benefits  provided for
under this  Agreement for (i) any period  during the term of this  Agreement and
prior  to the  establishment  of the  Employee's  Disability  during  which  the
Employee is unable to work due to the physical or mental infirmity,  or (ii) any
period of Disability which is prior to the Employee's  termination of employment
pursuant to this Section 10(b);  provided that any benefits paid pursuant to the
Company's long-term disability plan will continue as provided in such plan.

                    (2)  During  any  period  that the  Employee  shall  receive
disability  benefits and to the extent that the Employee shall be physically and
mentally  able to do so, she shall  furnish  such  information,  assistance  and
documents so as to assist in the continued  ongoing business of the Company and,
if able,  shall make herself  available  to the Company to undertake  reasonable
assignments  consistent  with her prior  position  and her  physical  and mental
health.  The  Company  shall  pay  all  reasonable   expenses  incident  to  the
performance  of any  assignment  given to the  Employee  during  the  disability
period.

         (c) Just  Cause.  The Board  may,  by written  notice to the  Employee,
immediately  terminate her employment at any time, for Just Cause.  The Employee
shall have no right to receive  compensation  or other  benefits  for any period
after termination for Just Cause.

<PAGE>
     (d) Without Just Cause;  Constructive Discharge.  The Board may, by written
notice to the Employee,  immediately  terminate her employment at any time for a
reason other than Just Cause,  in which event the Employee  shall be entitled to
receive the following  compensation and benefits (unless such termination occurs
during the  Protected  Period,  in which  event the  benefits  and  compensation
provided for in Section 12 shall apply):

                     (i) the salary provided pursuant to Section 3 hereof, up to
          the expiration date of this Agreement  including any renewal term (the
          "Expiration  Date"),  plus  said  salary  for an  additional  12-month
          period,

                     (ii)  a put option  meeting the  requirements  set forth in
          subsection  (f)  hereof,  provided  that  the  Employee  shall  not be
          entitled  to such put option if, on the date the  Employee  terminates
          employment,  either the Employee  does not own any common stock of the
          Bank or an  affiliated  company,  or such  common  stock  is  "readily
          tradeable" within the meaning of Code Section 401(a)(28)(C); and

                     (iii)  at the  Employee's  election  either  (A) cash in an
          amount  equal to the cost to the  Employee  of  obtaining  all health,
          life, disability and other benefits which the Employee would have been
          eligible to participate in through the Expiration Date, based upon the
          benefit levels  substantially equal to those that the Company provided
          for the  Employee  at the date of  termination  of  employment  or (B)
          continued  participation  under such Company benefit plans through the
          Expiration  Date,  but only to the extent the  Employee  continues  to
          qualify for participation therein. All amounts payable to the Employee
          shall be paid, at the option of the  Employee,  either (I) in periodic
          payments  through the Expiration  Date, or (II) in one lump sum within
          ten days of such termination.

     (e) Good Reason. The Employee shall be entitled to receive the compensation
and  benefits  payable  under  subsection  10(d)  hereof in the  event  that the
Employee  voluntarily  terminates  employment  within  90 days of an event  that
constitutes Good Reason,  (unless such voluntary  termination  occurs during the
Protected Period,  in which event the benefits and compensation  provided for in
Section 12 shall apply).

     (f) A put option deliverable to the Employee pursuant to this Section 10(d)
shall,  at a minimum,  obligate  the Company and any  successor  to purchase any
shares of its common stock and the common stock of any  affiliated  company that
the  Employee  owns on the date of  terminating  employment.  The  terms of such
purchase shall be set forth in a written instrument prepared and executed by the
Company,  and  shall  require  that (i) the  purchase  price be no less than the
appraised  value of such  stock,  determined  in  accordance  with Code  Section
401(a)(28)(C)  by an  appraiser  mutually  agreed upon by the  Employee  and the
Company,  as of  the  last  day of the  fiscal  year  in  which  the  Employee's
employment  terminates,  and (ii)  the  Company  make  such  payment  as soon as
practicable after the Company receives said appraisal.

     (g)  Termination or Suspension  Under Federal Law. 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.  Section  1828(k)  and any
regulations promulgated thereunder.

                                       6
<PAGE>

     (h) Voluntary  Termination by Employee.  Subject to Section 12 hereof,  the
Employee may voluntarily  terminate  employment with the Company during the term
of this  Agreement,  upon at least 90 days' prior written notice to the Board of
Directors,  in which case the  Employee  shall  receive  only her  compensation,
vested rights and employee  benefits up to the date of her  termination  (unless
such termination occurs pursuant to Section 10(d) hereof or within the Protected
Period,  in Section 12(a) hereof,  in which event the benefits and  compensation
provided for in Sections 10(d) or 12, as applicable, shall apply).

     11. No  Mitigation.  The  Employee  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 the Employee in any subsequent employment.

     12. Change in Control.

     (a) Trigger Events. The Employee shall be entitled to collect the severance
benefits  set  forth in  Subsection  (b)  hereof in lieu of any  benefits  under
Section 10 hereof in the event that (i) a Change in Control occurs,  or (ii) the
Company or its  successor(s)  in interest  terminate the  Employee's  employment
without her written  consent and for any reason other than Just Cause during the
Protected Period.

     (b) Amount of  Severance  Benefit.  If the  Employee  becomes  entitled  to
collect severance  benefits pursuant to Section 12(a) hereof,  the Company shall
(if not  paid by the Bank  pursuant  to the  employment  agreement  between  the
Employee and the Bank):

                     (i)  pay the  Employee  a  severance  benefit  equal to the
          difference  between the Code  Section  280G Maximum and the sum of any
          other  "parachute  payments" as defined under Code Section  280G(b)(2)
          that the Employee receives on account of the Change in Control.

                     (ii)   provide  such  long-term  disability  insurance  and
          medical insurance  benefits as are available to the Employee under the
          provisions of COBRA,  for 18 months (or such longer period,  as may be
          required thereunder).

     Said sum shall be paid in one lump sum  within ten days of the later of the
date of the Change in Control and the Employee's last day of employment with the
Bank or the  Company,  provided  that the  Employee  may elect at any time on or
before becoming  entitled to collect benefits  hereunder,  to have such benefits
paid in substantially equal installments over a period of up to 10 years. In the
event  that the  Employee,  the Bank,  and the  Company  jointly  agree that the
Employee has collected an amount  exceeding  the Code Section 280G Maximum,  the
parties  may agree in  writing  that such  excess  shall be treated as a loan ab
initio which the Employee  shall repay to the Company,  on terms and  conditions
mutually  agreeable to the parties,  together  with  interest at the  applicable
federal rate provided for in Section 7872(f)(2)(B) of the Code.

     13.  Indemnification.  The Company agrees that its Bylaws shall continue to
provide for indemnification of directors,  officers, employees and agents of the
Company,  including the Employee, during the full term of this Agreement, and to
at all times provide adequate insurance for such purposes.

                                      -7-
<PAGE>

         14. Reimbursement of Employee for Enforcement Proceedings. In the event
             -----------------------------------------------------
that any dispute  arises between the Employee and the Company as to the terms or
interpretation of this Agreement, whether instituted by formal legal proceedings
or otherwise, including any action that the Employee takes to defend against any
action taken by the Company,  the Employee shall be reimbursed for all costs and
expenses,  including  reasonable  attorneys'  fees,  arising from such  dispute,
proceedings  or actions,  provided  that the Employee  obtains  either a written
settlement  or  a  final   judgement  by  a  court  of  competent   jurisdiction
substantially in her favor. Such reimbursement  shall be paid within ten days of
Employee's furnishing to the Company written evidence, which may be in the form,
among other things,  of a cancelled  check or receipt,  of any costs or expenses
incurred by the Employee.

     15.  Federal Income Tax  Withholding.  The Company may withhold all federal
          -------------------------------
and state income or other taxes from any benefit payable under this Agreement as
shall be required pursuant to any law or government regulation or ruling.

     16. Successors and Assigns.
         ----------------------

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

     (b) Employee.  Since the Company is contracting for the unique and personal
skills of the  Employee,  the  Employee  shall be  precluded  from  assigning or
delegating her rights or duties  hereunder  without first  obtaining the written
consent of the Company; provided,  however, that nothing in this paragraph shall
preclude (i) the Employee from  designating a beneficiary to receive any benefit
payable  hereunder  upon her death,  or (ii) the executors,  administrators,  or
other legal  representatives  of the Employee or her estate from  assigning  any
rights hereunder to the person or persons entitled thereunto.

     (c)  Attachment.  Except as required  by law, no right to receive  payments
under this Agreement shall be subject to anticipation,  commutation, alienation,
sale, assignment, encumbrance, charge, pledge, or hypothecation or to exclusion,
attachment,  levy or similar  process or assignment by operation of law, and any
attempt, voluntary or involuntary, to effect any such action shall be null, void
and of no effect.

     17.  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.

     18. Applicable Law. Except to the extent preempted by Federal law, the laws
         --------------
of the State of Arkansas shall govern this Agreement in all respects, whether as
to its validity, construction, capacity, performance or otherwise.

     19.  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.

                                      -8-
<PAGE>

     20. Entire  Agreement.  This Agreement,  together with any understanding or
         -----------------
modifications  thereof as agreed to in writing by the parties,  shall constitute
the entire agreement between the parties hereto.

         IN WITNESS WHEREOF, the parties have executed this Agreement on the day
and year first hereinabove written.

ATTEST:                                  HCB BANCSHARES, INC.

/s/ Paula J. Bergstrom                   By: /s/ Cameron D. McKeel
-----------------------------                ----------------------------------
Paula J. Bergstrom, Secretary                 Cameron D. McKeel, President and
                                              Chief Executive Officer

WITNESS:

/s/ Tamra L. Moore                            /s/ Vida H. Lampkin
-----------------------------                 ---------------------------------
Tamra L. Moore                                Vida H. Lampkin

                                      -9-
<PAGE>
                              EMPLOYMENT AGREEMENT
                              --------------------

         THIS AGREEMENT is entered into this 17th day of February,  2000, by and
between  HCB  Bancshares,  Inc.  (the  "Company")  and  Cameron D.  McKeel  (the
"Employee"),  effective  on the date (the  "Effective  Date") this  agreement is
executed.

         WHEREAS,  the  Employee  has  heretofore  been  employed  by  HEARTLAND
Community  Bank (the "Bank") as its President and Chief  Executive  Officer,  is
experienced  in all  phases of the  business  of the Bank,  and has  become  the
President and Chief Executive Officer of the Company; and

         WHEREAS,  the Board of Directors (the "Board") of the Company  believes
it is in the best interests of the Company to enter into this Agreement with the
Employee  in  order  to  assure  continuity  of  management  of the Bank and the
Company,  and to reinforce and encourage the continued  attention and dedication
of the Employee to his assigned duties; and

         WHEREAS, the parties desire by this writing to set forth the continuing
employment relationship between the Company and the Employee.

         NOW, THEREFORE, it is AGREED as follows:

         1.       Defined Terms
                  -------------

         When used anywhere in this  Agreement,  the following  terms shall have
the meaning set forth herein.

         (a)  "Affiliate"  shall mean any "parent  corporation"  or  "subsidiary
corporation"  of the Bank,  as the terms are defined in Section  424(e) and (f),
respectively, of the Code.

         (b)      A "Change in Control" shall be deemed to have occurred if:

                    (i) as a result  of,  or in  connection  with,  any  initial
         public  offering,  tender  offer or  exchange  offer,  merger  or other
         business  combination,  sale  of  assets  or  contested  election,  any
         combination of the foregoing transactions,  or any similar transaction,
         the persons who were non-employee  directors of the Company or the Bank
         before such transaction  cease to constitute a majority of the Board of
         Directors of the Company or the Bank or any successor to the Company or
         the Bank;

                    (ii)  the Company or the Bank transfers substantially all of
          its assets to another  corporation  which is not an  Affiliate  of the
          Company;

                    (iii) the Company sells  substantially  all of the assets an
         Affiliate  which  accounted for 50% or more of the  controlled  group's
         assets immediately prior to such sale;

                    (iv) any  "person"  including  a "group" is or  becomes  the
         "beneficial  owner",  directly  or  indirectly,  of  securities  of the
         Company or the Bank representing  twenty-five

<PAGE>

          percent  (25%) or more of the combined  voting power of the Company or
          the Bank's  outstanding  securities (with the terms in quotation marks
          having the meaning set forth under the federal securities laws); or

                    (v) the Company or the Bank is merged or  consolidated  with
         another  corporation  and, as a result of the merger or  consolidation,
         less than seventy percent (70%) of the outstanding voting securities of
         the surviving or resulting corporation is owned in the aggregate by the
         former stockholders of the Company or the Bank.

         Notwithstanding  the  foregoing,  a "Change  in  Control"  shall not be
deemed to occur solely by reason of a transaction  in which the Bank converts to
the stock form of  organization,  or creates an independent  holding  company in
connection therewith.

         (c) "Code"  shall mean the Internal  Revenue  Code of 1986,  as amended
from time to time, and as interpreted through applicable rulings and regulations
in effect from time to time.

         (d)  "Code  Section 280G  Maximum"  shall  mean  product  of  2.99  and
the Employee's "base amount" as defined in Code Section 280G(b)(3).

         (e) "Good Reason" shall mean any of the following events, which has not
been  consented  to in advance by the Employee in writing:  (i) the  requirement
that  the  Employee  move his  personal  residence,  or  perform  his  principal
executive functions,  more than 30 miles from his primary office as of the later
of the Effective Date and the most recent voluntary  relocation by the Employee;
(ii) a  material  reduction  in the  Employee's  base  compensation  under  this
Agreement as the same may be increased  from time to time;  (iii) the failure by
the Bank or the Company to continue to provide the  Employee  with  compensation
and benefits  provided  under this  Agreement as the same may be increased  from
time to time, or with benefits  substantially  similar to those  provided to him
under any of the employee  benefit  plans in which the Employee now or hereafter
becomes a  participant,  or the taking of any action by the Bank or the  Company
which would  directly or  indirectly  reduce any of such benefits or deprive the
Employee of any material  fringe  benefit  enjoyed by him under this  Agreement;
(iv) the  assignment to the Employee of duties and  responsibilities  materially
different from those  normally  associated  with his position;  (v) a failure to
reelect the Employee to the Board of  Directors  of the Bank or the Company,  if
the  Employee  has  served  on such  Board  at any time  during  the term of the
Agreement;   (vi)  a  material   diminution  or  reduction  in  the   Employee's
responsibilities  or  authority   (including   reporting   responsibilities)  in
connection with his employment with the Bank or the Company; or (vii) a material
reduction in the secretarial or other administrative support of the Employee. In
addition, "Good Reason" shall mean an impairment of the Employee's health to the
extent that it makes continued  performance of his duties hereunder hazardous to
his physical or mental health.

         (f) "Just Cause"  shall mean,  in the good faith  determination  of the
Company's Board of Directors, the Employee's personal dishonesty,  incompetence,
willful  misconduct,   breach  of  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.
The Employee shall have no right to receive  compensation  or other benefits for
any period after
                                      -2-
<PAGE>
termination  for Just Cause.  No act, or failure to act, on the Employee's  part
shall be  considered  "willful"  unless he has acted,  or failed to act, with an
absence of good faith and without a reasonable belief that his action or failure
to act was in the best interest of the Bank and the Company.

         (h)  "Protected  Period"  shall mean the period that begins on the date
one year before the Change in Control and ends on the closing date of the Change
in Control.

         (h) "Trust"  shall mean a grantor  trust that is designed in accordance
with Revenue  Procedure 92-64 and has a trustee  independent of the Bank and the
Company.

         2.  Employment.  The  Employee is employed as the  President  and Chief
             ----------
Executive Officer of the Company.  The Employee shall render such administrative
and  management  services for the Company as are  currently  rendered and as are
customarily  performed by persons situated in a similar executive capacity.  The
Employee shall also promote, by entertainment or otherwise, as and to the extent
permitted by law, the business of the Company. The Employee's other duties shall
be such as the Board may from time to time reasonably  direct,  including normal
duties as an officer of the Company.

         3. Consideration from Company: Joint and Several Liability.  In lieu of
            -------------------------------------------------------
paying the Employee a base salary during the term of this Agreement, the Company
hereby  agrees  that to the extent  permitted  by law,  it shall be jointly  and
severally  liable  with the Bank for the  payment of all  amounts  due under the
employment agreement between the Bank and the Employee.  Nevertheless, the Board
may in its discretion at any time during the term of this Agreement agree to pay
the  Employee a base salary for the  remaining  term of this  Agreement.  If the
Board agrees to pay such salary,  the Board shall  thereafter  review,  not less
often  than  annually,  the  rate  of the  Employee's  salary,  and in its  sole
discretion may decide to increase his salary.

         4.  Discretionary   Bonuses.  The  Employee  shall  participate  in  an
             -----------------------
equitable  manner with all other senior  management  employees of the Company in
discretionary  bonuses  that  the  Board  may  award  from  time  to time to the
Company's senior management  employees.  No other  compensation  provided for in
this  Agreement  shall  be  deemed  a  substitute  for the  Employee's  right to
participate  in  such  discretionary  bonuses.  Notwithstanding  the  foregoing,
following a Change in Control, the Employee shall receive  discretionary bonuses
that are made no less frequently than, and in amounts not less than, the average
annual  discretionary  bonuses  paid to the  Employee  during  each of the three
calendar  years  immediately  preceding the year in which such Change in Control
occurs.

         5.  Participation in Retirement, Medical and Other Plans
             ----------------------------------------------------

         (a) During the term of this  Agreement,  the Employee shall be eligible
to  participate  in  the  following   benefit  plans:   group   hospitalization,
disability,  health, dental, sick leave, life insurance,  travel and/or accident
insurance, auto allowance/auto lease, retirement,  pension, and/or other present
or future  qualified  plans provided by the Company,  generally  which benefits,
taken  as a  whole,  must be at least as  favorable  as those in  effect  on the
Effective Date.

                                      -3-
<PAGE>

         (b) The  Employee  shall  be  eligible  to  participate  in any  fringe
benefits which are or may become  available to the Company's  senior  management
employees,  including  for example:  any stock option or incentive  compensation
plans, and any other benefits which are commensurate  with the  responsibilities
and functions to be performed by the Employee under this Agreement. The Employee
shall be reimbursed for all reasonable  out-of-pocket business expenses which he
shall  incur  in  connection   with  his  services  under  this  Agreement  upon
substantiation of such expenses in accordance with the policies of the Company.

         6. Term.  The Company  hereby  employs the  Employee,  and the Employee
            ----
hereby accepts such employment under this Agreement,  for the period  commencing
on the Effective  Date and ending 12 months  thereafter (or such earlier date as
is determined in accordance  with Section 9). Only those members of the Board of
Directors  who have no personal  interest  in this  Employment  Agreement  shall
discuss and vote on the approval and subsequent review of this Agreement.

         7. Loyalty; Noncompetition.
            -----------------------

         (a)  During  the  period of his  employment  hereunder  and  except for
illnesses,  reasonable vacation periods,  and reasonable leaves of absence,  the
Employee shall devote all his full business time, attention,  skill, and efforts
to the faithful  performance of his duties hereunder;  provided,  however,  from
time to time, the Employee 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 or any of its  subsidiaries or
affiliates,  or unfavorably  affect the  performance  of the  Employee's  duties
pursuant  to this  Agreement,  or will not  violate  any  applicable  statute or
regulation.  "Full  business  time" is  hereby  defined  as that  amount of time
usually  devoted to like  companies by similarly  situated  executive  officers.
During the term of his employment  under this Agreement,  the Employee shall not
engage in any business or activity contrary to the business affairs or interests
of the Company, or be gainfully employed in any other position or job other than
as provided above.

         (b) Nothing contained in this Paragraph 7 shall be deemed to prevent or
limit the Employee's right to invest in the capital stock or other securities of
any business  dissimilar  from that of the Company,  or,  solely as a passive or
minority investor, in any business.

         8.  Standards.  The  Employee  shall  perform  his  duties  under  this
             ---------
Agreement  in  accordance  with  such  reasonable  standards  as the  Board  may
establish from time to time. The Company will provide  Employee with the working
facilities and staff  customary for similar  executives and necessary for him to
perform his duties.

         9. Vacation and Sick Leave. At such reasonable times as the Board shall
            -----------------------
in its discretion permit,  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 in accordance
with the policies that the Board periodically  establishes for senior management
employees of the Company.

                                      -4-
<PAGE>

     (b) The Employee  shall not receive any  additional  compensation  from the
Company on account of his  failure  to take a vacation  or sick  leave,  and the
Employee shall not accumulate  unused vacation from one fiscal year to the next,
except in either case to the extent authorized by the Board.

     (c) In addition to the  aforesaid  paid  vacations,  the Employee  shall be
entitled,   without  loss  of  pay,  to  absent  himself  voluntarily  from  the
performance of his employment  with the Company 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 Employee a leave or
leaves of  absence,  with or  without  pay,  at such time or times and upon such
terms and conditions as such Board in its discretion may determine.

     (d) In  addition,  the  Employee  shall be entitled to an annual sick leave
benefit as established by the Board.

     10.  Termination and  Termination  Pay.  Subject to Section 12 hereof,  the
          ---------------------------------
Employee's   employment   hereunder  may  be  terminated   under  the  following
circumstances:

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

         (b) Disability. (1) The Company may terminate the Employee's employment
after  having  established  the  Employee's  Disability.  For  purposes  of this
Agreement,  "Disability"  means a physical or mental infirmity which impairs the
Employee's ability to substantially  perform his duties under this Agreement and
which  results  in the  Employee  becoming  eligible  for  long-term  disability
benefits under the Company's  long-term  disability plan (or, if the Company has
no such plan in effect,  which impairs the Employee's  ability to  substantially
perform his duties under this Agreement for a period of 180  consecutive  days).
The Employee  shall be entitled to the  compensation  and benefits  provided for
under this  Agreement for (i) any period  during the term of this  Agreement and
prior  to the  establishment  of the  Employee's  Disability  during  which  the
Employee is unable to work due to the physical or mental infirmity,  or (ii) any
period of Disability which is prior to the Employee's  termination of employment
pursuant to this Section 10(b);  provided that any benefits paid pursuant to the
Company's long-term disability plan will continue as provided in such plan.

                    (2)  During  any  period  that the  Employee  shall  receive
disability  benefits and to the extent that the Employee shall be physically and
mentally  able to do so,  he shall  furnish  such  information,  assistance  and
documents so as to assist in the continued  ongoing business of the Company and,
if able,  shall make himself  available  to the Company to undertake  reasonable
assignments  consistent  with his prior  position  and his  physical  and mental
health.  The  Company  shall  pay  all  reasonable   expenses  incident  to  the
performance  of any  assignment  given to the  Employee  during  the  disability
period.

                                      -5-
<PAGE>

         (c) Just  Cause.  The Board  may,  by written  notice to the  Employee,
immediately  terminate his employment at any time, for Just Cause.  The Employee
shall have no right to receive  compensation  or other  benefits  for any period
after termination for Just Cause.

         (d)  Without  Just  Cause;  Constructive  Discharge.  The Board may, by
written notice to the Employee, immediately terminate his employment at any time
for a reason  other  than  Just  Cause,  in which  event the  Employee  shall be
entitled  to receive  the  following  compensation  and  benefits  (unless  such
termination  occurs during the Protected Period, in which event the benefits and
compensation provided for in Section 12 shall apply):

                    (i) the salary provided  pursuant to Section 3 hereof, up to
         the expiration  date of this Agreement  including any renewal term (the
         "Expiration Date"), plus said salary for an additional 12-month period,

                    (ii) a put  option  meeting  the  requirements  set forth in
         subsection (f) hereof, provided that the Employee shall not be entitled
         to such put option if, on the date the Employee terminates  employment,
         either the  Employee  does not own any  common  stock of the Bank or an
         affiliated  company, or such common stock is "readily tradeable" within
         the meaning of Code Section 401(a)(28)(C); and

                    (iii)  at the  Employee's  election  either  (A)  cash in an
         amount equal to the cost to the Employee of obtaining all health, life,
         disability  and other  benefits  which  the  Employee  would  have been
         eligible to participate in through the Expiration  Date, based upon the
         benefit levels  substantially  equal to those that the Company provided
         for the  Employee  at the  date of  termination  of  employment  or (B)
         continued  participation  under such Company  benefit plans through the
         Expiration  Date,  but only to the extent  the  Employee  continues  to
         qualify for participation  therein. All amounts payable to the Employee
         shall be paid,  at the option of the  Employee,  either (I) in periodic
         payments  through the  Expiration  Date, or (II) in one lump sum within
         ten days of such termination.

         (e)  Good  Reason.  The  Employee  shall be  entitled  to  receive  the
compensation  and benefits  payable under  subsection  10(d) hereof in the event
that the Employee voluntarily  terminates  employment within 90 days of an event
that constitutes Good Reason,  (unless such voluntary  termination occurs during
the Protected Period, in which event the benefits and compensation  provided for
in Section 12 shall apply).

         (f) A put option  deliverable to the Employee  pursuant to this Section
10(d) shall,  at a minimum,  obligate the Company and any  successor to purchase
any shares of its common  stock and the common stock of any  affiliated  company
that the Employee owns on the date of terminating employment.  The terms of such
purchase shall be set forth in a written instrument prepared and executed by the
Company,  and  shall  require  that (i) the  purchase  price be no less than the
appraised  value of such  stock,  determined  in  accordance  with Code  Section
401(a)(28)(C)  by an  appraiser  mutually  agreed upon by the  Employee  and the
Company,  as of  the  last  day of the  fiscal  year  in  which  the  Employee's
employment  terminates,  and (ii)  the  Company  make  such  payment  as soon as
practicable after the Company receives said appraisal.

                                      -6-
<PAGE>

     (g)  Termination or Suspension  Under Federal Law. 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.  Section  1828(k)  and any
regulations promulgated thereunder.

     (h) Voluntary  Termination by Employee.  Subject to Section 12 hereof,  the
Employee may voluntarily  terminate  employment with the Company during the term
of this  Agreement,  upon at least 90 days' prior written notice to the Board of
Directors,  in which case the  Employee  shall  receive  only his  compensation,
vested rights and employee  benefits up to the date of his  termination  (unless
such termination occurs pursuant to Section 10(d) hereof or within the Protected
Period,  in Section 12(a) hereof,  in which event the benefits and  compensation
provided for in Sections 10(d) or 12, as applicable, shall apply).

     11. No  Mitigation.  The  Employee  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 the Employee in any subsequent employment.

     12. Change in Control.
         -----------------

         (a)  Trigger  Events.  The  Employee  shall be  entitled to collect the
severance  benefits set forth in  Subsection  (b) hereof in lieu of any benefits
under  Section 10 hereof in the event that (i) a Change in  Control  occurs,  or
(ii) the  Company or its  successor(s)  in  interest  terminate  the  Employee's
employment  without his written consent and for any reason other than Just Cause
during the Protected Period.

         (b) Amount of Severance  Benefit.  If the Employee  becomes entitled to
collect severance  benefits pursuant to Section 12(a) hereof,  the Company shall
(if not  paid by the Bank  pursuant  to the  employment  agreement  between  the
Employee and the Bank):

                     (i)  pay the  Employee  a  severance  benefit  equal to the
          difference  between the Code  Section  280G Maximum and the sum of any
          other  "parachute  payments" as defined under Code Section  280G(b)(2)
          that the Employee receives on account of the Change in Control.

                    (ii) provide such long-term disability insurance and medical
         insurance   benefits  as  are  available  to  the  Employee  under  the
         provisions of COBRA,  for 18 months (or such longer  period,  as may be
         required thereunder).

        Said  sum shall be paid in one lump sum  within ten days of the later of
the date of the Change in Control and the Employee's last day of employment with
the Bank or the Company,  provided that the Employee may elect at any time on or
before becoming  entitled to collect benefits  hereunder,  to have such benefits
paid in substantially equal installments over a period of up to 10 years. In the
event  that the  Employee,  the Bank,  and the  Company  jointly  agree that the
Employee has collected an amount  exceeding  the Code Section 280G Maximum,  the
parties  may agree in  writing  that such  excess  shall be treated as a loan ab
initio which the Employee  shall repay to the Company,  on terms and  conditions
mutually  agreeable to the parties,  together  with  interest at the  applicable
federal rate provided for in Section 7872(f)(2)(B) of the Code.

                                      -7-
<PAGE>

    13.  Indemnification.  The Company agrees that its Bylaws shall continue to
         ---------------
provide for indemnification of directors,  officers, employees and agents of the
Company,  including the Employee, during the full term of this Agreement, and to
at all times provide adequate insurance for such purposes.

     14.  Reimbursement  of Employee for Enforcement  Proceedings.  In the event
          -----------------------------------------------------
that any dispute  arises between the Employee and the Company as to the terms or
interpretation of this Agreement, whether instituted by formal legal proceedings
or otherwise, including any action that the Employee takes to defend against any
action taken by the Company,  the Employee shall be reimbursed for all costs and
expenses,  including  reasonable  attorneys'  fees,  arising from such  dispute,
proceedings  or actions,  provided  that the Employee  obtains  either a written
settlement  or  a  final   judgement  by  a  court  of  competent   jurisdiction
substantially in his favor. Such reimbursement  shall be paid within ten days of
Employee's furnishing to the Company written evidence, which may be in the form,
among other things,  of a cancelled  check or receipt,  of any costs or expenses
incurred by the Employee.

     15.  Federal Income Tax  Withholding.  The Company may withhold all federal
          -------------------------------
and state income or other taxes from any benefit payable under this Agreement as
shall be required pursuant to any law or government regulation or ruling.

     16. Successors and Assigns.
         ----------------------

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

         (b)  Employee.  Since the  Company  is  contracting  for the unique and
personal skills of the Employee,  the Employee shall be precluded from assigning
or delegating his rights or duties hereunder without first obtaining the written
consent of the Company; provided,  however, that nothing in this paragraph shall
preclude (i) the Employee from  designating a beneficiary to receive any benefit
payable  hereunder  upon his death,  or (ii) the executors,  administrators,  or
other legal  representatives  of the Employee or his estate from  assigning  any
rights hereunder to the person or persons entitled thereunto.

         (c) Attachment. Except as required by law, no right to receive payments
under this Agreement shall be subject to anticipation,  commutation, alienation,
sale, assignment, encumbrance, charge, pledge, or hypothecation or to exclusion,
attachment,  levy or similar  process or assignment by operation of law, and any
attempt, voluntary or involuntary, to effect any such action shall be null, void
and of no effect.

     17.  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.

     18. Applicable Law. Except to the extent preempted by Federal law, the laws
         --------------
of the State of Arkansas shall govern this Agreement in all respects, whether as
to its validity, construction, capacity, performance or otherwise.

                                      -8-
<PAGE>

     19.  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.

     20. Entire  Agreement.  This Agreement,  together with any understanding or
         -----------------
modifications  thereof as agreed to in writing by the parties,  shall constitute
the entire agreement between the parties hereto.

         IN WITNESS WHEREOF, the parties have executed this Agreement on the day
and year first hereinabove written.

ATTEST:                              HCB BANCSHARES, INC.

/s/ Paula J. Bergstrom               By: /s/ Vida H. Lampkin
---------------------------------        --------------------------------------
Paula J. Bergstrom, Secretary            Vida H. Lampkin, Chairman of the Board

WITNESS:

/s/ Tamra L. Moore                       /s/ Cameron D. McKeel
---------------------------------        ---------------------------------
Tamra L. Moore                           Cameron D. McKeel

                                      -9-FIRST LANCASTER FEDERAL SAVINGS BANK
                   SUPPLEMENTAL EXECUTIVE RETIREMENT AGREEMENT
                   -------------------------------------------

         This Agreement  entered into as of the 7th day of December,  1995 (the
"Effective  Date") by and between  First  Lancaster  Federal  Savings  Bank (the
"Bank") and Tony A. Merida (the "Executive").

         WHEREAS,  the  Executive  currently  is  employed  in the  capacity  of
Executive  Vice  President  of the Bank,  and is  expected  to  continue in this
capacity; and

         WHEREAS,  the Bank desires to retain the  services of the  Executive to
the  Bank  and as  such  wishes  to  provide  the  Executive  with  supplemental
retirement income as an added incentive to remain employed at the Bank.

         NOW, THEREFORE, in consideration of the foregoing, the mutual covenants
and agreements hereinafter contained, and other good and valuable consideration,
receipt  of which is  hereby  acknowledged,  the  parties  hereto  agree to this
Agreement as follows:

                                    ARTICLE I
                                   DEFINITIONS
                                   -----------

         "Agreement"  shall mean this  agreement  between the  Executive and the
Bank.

         "Annual  Offset  Amount"  shall mean the sum of (i) the primary  social
security  benefit  payable  annually to the  Executive as of the earliest  date,
following his termination of employment, on which he could begin to collect such
benefit  (regardless  of when such  payment  actually  begins),  (ii) the annual
benefit that would be payable to the Executive  under the Bank's Pension Plan in
the form of a 50% joint  and  survivor  annuity,  with his  Surviving  Spouse as
contingent   beneficiary,   commencing   upon  his   termination  of  employment
(regardless of when he actually begins to collect such benefits),  and (iii) the
annual  amount  that would be payable to the  Executive  if that  portion of his
account under the Bank's 401(k) Plan which would be  attributable  to the Bank's
contributions  (assuming the Executive contributed the maximum amounts permitted
by Federal  tax laws)  were paid to him in the form of a 50% joint and  survivor
annuity,  with his Surviving Spouse as contingent  beneficiary,  commencing upon
his termination of employment  (regardless of when he actually begins to collect
such benefits).

         "Average Annual Compensation" shall mean the average of the Executive's
highest Compensation for the three calendar years (whether or not such years are
consecutive) in the five calendar years immediately  preceding the calendar year
in which his employment with the Bank terminates for any reason.

         "Bank" shall mean First Lancaster Federal Savings Bank.

         "Benefits"  shall  mean,  collectively,   the  benefits  payable  under
Articles II and III of the Agreement.
<PAGE>

         "Board" shall mean the board of directors of the Bank.

         "Change in  Control"  is defined  in the Bank's  Directors'  Retirement
Plan,  and shall be defined in the same manner for  purposes of this  Agreement.
Any  amendment  to the Bank's  Directors'  Retirement  Plan that  modifies  said
definition shall be deemed to apply with equal force,  effect, and timing to the
definition  of Change in Control for purposes of this  Agreement,  except that a
modification  that may adversely affect a Participant shall be ineffectual as to
the Executive unless he consents in writing to be bound by the modification.

         "Compensation"  shall  mean  the  amount  of W-2  earnings  paid to the
Executive  by the Bank (plus any amounts  withheld  from the  Executive  under a
401(k) Plan or cafeteria plan sponsored by the Bank) within a calendar year.

         "Disability"  shall mean a physical or mental  infirmity  which impairs
the  Executive's  ability to  substantially  perform  his duties to the Bank and
which  results in the  Executive  becoming  eligible  for  long-term  disability
benefits under the Bank's long-term disability plan (or, if the Bank has no such
plan in effect,  which impairs the Executive's ability to substantially  perform
his  duties to the Bank for a period of one  hundred  eighty  (180)  consecutive
days).

         "Executive" shall mean Tony A. Merida.

         "Just Cause" shall mean, in the good faith  determination of the Board,
the Executive's personal dishonesty, incompetence, willful misconduct, breach of
fiduciary, in the good faith determination of the Board, 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  case-and-desist  order,  or  material  breach  of any  provision  of this
Agreement.

         "Surviving  Spouse" shall mean the Executive's  spouse,  if any, on the
date of his  death,  but shall  not  include  a spouse  from whom he is  legally
separated or divorced at the time of his death.

         "Vested  Percentage" shall be equal to the product of (i) the number of
the  Executive's  full  calendar  years of  employment  with the Bank  following
December 31, 1995 up to 10 years,  and (ii) ten percent  (10%).  Notwithstanding
the foregoing,  the Executive's  Vested Percentage shall accelerate to 100% upon
(i)  termination of his  employment  due to his death or  Disability,  or (ii) a
Change in Control.

                                   ARTICLE II
                      RETIREMENT BENEFITS FOR THE EXECUTIVE
                      -------------------------------------

         In the event that the  Executive's  employment with the Bank terminates
for any reason other than death or Just Cause,  the Bank shall pay the Executive
an annual  payment for the  remainder of his life in an amount per year equal to
(i)  the  product  of his  Vested  Percentage  and  70% of  his  Average  Annual
Compensation,  less (ii) his Annual Offset  Amount.  The payments due under this
Article  shall begin on the first day of the second month  following the date of
the

<PAGE>
Executive's  termination of employment  with the Bank,  and shall  thereafter be
made on the annual  anniversary  dates of such  first  payment  date.  Except as
provided in Article III, no Benefits shall be payable  hereunder after the death
of the Executive.

         Notwithstanding  the foregoing,  but only to the extent  required under
federal banking law, the amount payable hereunder shall be reduced to the extent
that on the date of the Employee's  termination  of  employment,  either (i) the
present  value of his  Benefits  exceeds the  limitations  that are set forth in
Regulatory Bulletin 27a of the Office of Thrift Supervision, as in effect on the
Effective Date, or (ii) such reduction is necessary to avoid subjecting the Bank
to  liability  under  Section  280G of the  Internal  Revenue  Code of 1986,  as
amended.  In  addition,  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. Section 1828(k) and any regulations promulgated thereunder.

                                   ARTICLE III
                                 DEATH BENEFITS
                                 --------------

         In the event that the Executive dies before benefit  payments  commence
under Article II hereof, the Bank shall pay to the Executive's  Surviving Spouse
an annual  payment for the  remainder of the  Surviving  Spouse's  life (up to a
maximum of 20 years) in an amount  equal to 50% of the annual  benefit  that the
Executive  would have received under Article II if he had terminated  employment
on the date of his death and then had a Vested Percentage equal to 100%.

         In the event  that the  Executive  dies  after  benefit  payments  have
commenced  under  Article  II  hereof,  the Bank  shall  pay to the  Executive's
Surviving  Spouse an annual payment for the remainder of the Surviving  Spouse's
life (up to a  maximum  of 20 years)  in an  amount  equal to 50% of the  annual
Benefits  that the  Executive  would have received if he had survived to collect
all of the Benefits payable to him under this Agreement.

         Death  benefits  shall be payable  only  pursuant to this  Article III,
shall  commence  on the first day of the first month  following  the date of the
Executive's  death, and shall thereafter be made on the annual anniversary dates
of such first payment date.

                                   ARTICLE IV
                               SOURCE OF BENEFITS
                               ------------------

         The primary source of Benefits shall be the general assets of the Bank.
However,  the Bank may establish and fund an  irrevocable  trust (the  "Trust"),
whereby  assets  of the Bank  will be held by the  Trust  pursuant  to the Trust
Agreement,  subject to claims by general  creditors  of the Bank by  appropriate
judicial  action as provided by such Trust.  Any  insurance  policy or any other
asset acquired or held by the Bank in connection with the liabilities assumed by
it hereunder,  shall not be deemed to be held under any trust for the benefit of
the  Executive  or his  Surviving  Spouse (if any),  or to be  security  for the
performance of the obligations of the Bank,

<PAGE>
but shall be, and remain, a general, unpledged,  unrestricted asset of the Bank.
Neither  Executive nor his Surviving  Spouse (if any) shall be named as owner of
any insurance policy, if any, held in connection with the liabilities hereunder.

         The trustee of the Trust shall inform the Board  annually  prior to the
commencement of each fiscal year as to the manner in which Trust assets shall be
invested. In the event that funds from the Trust are at any time insufficient to
pay  Benefits,  the  obligation  to pay Benefits  shall  constitute an unfunded,
unsecured promise by the Bank to provide such payments as and to the extent such
Benefits become payable.  In such case,  Benefits shall be paid from the general
assets of the Bank, and no person shall, by virtue of this  Agreement,  have any
interest in such assets (other than as an unsecured creditor of the Bank).

                                    ARTICLE V
                                   ASSIGNMENT
                                   ----------

         Except as  otherwise  provided  by this  Agreement,  it is agreed  that
neither the  Executive  nor his  Surviving  Spouse (if any) nor his estate shall
have any right to  commute,  sell,  assign,  transfer,  encumber  and  pledge or
otherwise convey the right to receive any Benefits hereunder, which Benefits and
the  rights   thereto   are   expressly   declared  to  be   nonassignable   and
nontransferable.

                                   ARTICLE VI
                            NO RETENTION OF SERVICES
                   TERMINATION OR SUSPENSION UNDER FEDERAL LAW
                   -------------------------------------------

         The Benefits  payable under this Agreement shall be independent of, and
in addition to, any other employment  agreement that may exist from time to time
between the parties hereto, or any other compensation payable by the Bank to the
Executive, whether salary, bonus, retirement income under employee benefit plans
sponsored or  maintained by the Bank, or  otherwise.  This  Agreement  shall not
restrict  the right of the Bank to  terminate  the  Executive's  employment,  or
restrict the right of the Executive to terminate his employment.

         If  the  Executive  is  removed  and/or  permanently   prohibited  from
participating  in the  conduct of the Bank's  affairs by an order  issued  under
Sections  8(e)(4) or 8(g)(1) of the Federal  Deposit  Insurance Act ("FDIA") (12
U.S.C.  1818(e)(4) or (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
parties shall not be affected.

         If the Bank is in default (as defined in Section 3(x)(1) of FDIA),  all
obligations  under this  Agreement  shall  terminate  as of the date of default;
however, this paragraph shall not affect the vested rights of the parties.

         All  obligations  under this Agreement shall  terminate,  except to the
extent that  continuation  of this  Agreement  is  necessary  for the  continued
operation of the Bank:  (i) by the Director of the Office of Thrift  Supervision
("Director  of  OTS"),  or his or her  designee,  at the time  that the  Federal
Deposit  Insurance  Corporation  ("FDIC") or the  Resolution  Trust  Corporation
enters into an agreement to provide assistance to or on behalf of the Bank under
the

<PAGE>

authority  contained  in Section  13(c) of FDIA;  or (ii) by the Director of the
OTS, or his or her designee, at the time that the Director of the OTS, or his or
her  designee  approves  a  supervisory  merger to resolve  problems  related to
operation of the Bank or when the Bank is  determined by the Director of the OTS
to be in an unsafe or unsound condition. Such action shall not affect any vested
rights of the parties.

         If a notice  served  under  Section  8(e)(3)  or (g)(1) of the FDIA (12
U.S.C. 1818(e)(3) or (g)(1)) suspends and/or temporarily prohibits the Executive
from participating in the conduct of the Bank's affairs,  the Bank's obligations
under this Agreement  shall be suspended as of the date of such service,  unless
stayed by appropriate  proceedings.  If the charges in the notice are dismissed,
the  Bank  may in its  discretion  (i)  pay  the  Executive  all or  part of the
compensation  withheld while its contract  obligations were suspended,  and (ii)
reinstate (in whole or in part) any of its obligations which were suspended.

                                   ARTICLE VII
                            RIGHTS OF THE EXECUTIVE.
                            ------------------------

         The rights of the Executive and of his Surviving  Spouse (if any) under
this Agreement shall be solely those of an unsecured creditor of the Bank except
as may be provided in this Article.

                                  ARTICLE VIII
                               CHANGE IN CONTROL;
                          OR TERMINATION FOR JUST CAUSE
                          -----------------------------

         The  provisions of this Article shall  supersede any provisions of this
Agreement to the contrary.

         In the event of a Change in Control,  the Executive's Vested Percentage
shall become 100%.  In addition,  at any time no later than five  business  days
following a Change in Control, the Bank shall establish the Trust (if it has not
been previously  established),  and shall contribute an amount to the Trust that
is projected to be sufficient to enable the Trust to pay all Benefits that could
become payable.

         In the event of the  Executive's  termination  of  employment  for Just
Cause,  no  Benefits  shall be  payable  hereunder,  and the Bank  shall have no
further  obligations  hereunder,   unless  and  to  the  extent  that  the  Bank
determines, in its sole and absolute discretion, to the contrary.

                                   ARTICLE IX
                                 REORGANIZATION
                                 --------------

         The Bank  agrees that it will not merge or  consolidate  with any other
corporation or organization,  or permit its business activities to be taken over
by any  other  organization,  unless  and  until the  succeeding  or  continuing
corporation  or  other  organization  shall  expressly  assume  the  rights  and
obligations  of the Bank herein set forth.  The Bank further agrees that it will
not cease its business  activities  or terminate  its  existence,  other than as
heretofore set forth in this paragraph,  without having made adequate  provision
for the fulfillment of its obligation hereunder.
<PAGE>

                                    ARTICLE X
                                   AMENDMENTS
                                   ----------

         This  Agreement may be revoked or amended in whole or in part only by a
writing signed by all of the parties hereto.

                                   ARTICLE XI
                                    STATE LAW
                                   ----------

         This  Agreement  shall be construed and governed in all respects  under
and by the laws of the Commonwealth of Kentucky,  except to the extent preempted
by federal law. If any provision of this  Agreement  shall be held by a court of
competent jurisdiction to be invalid or unenforceable,  the remaining provisions
hereof shall continue to be fully effective.

                                   ARTICLE XII
                                    HEADINGS
                                   -----------

         Heading and  subheadings in this Agreement are inserted for convenience
and reference only and constitute no part of this Agreement.

                                  ARTICLE XIII
                                  COUNTERPARTS
                                  ------------

         This  Agreement  may be  executed  in an  original  and any  number  of
counterparts,  each of which  shall  constitute  an original of one and the same
instrument.

                                  ARTICLE XIV
                                 EFFECTIVE DATE
                                 --------------

         This  Agreement  shall become  effective on the date first  hereinabove
written, subject to such changes as the Bank's Board of Directors may reasonably
deem to be necessary or proper in order to obtain  approval of the  Agreement by
the Office of Thrift  Supervision.  Unless terminated earlier in accordance with
Article  XVII,  this  Agreement  shall  remain  in  effect  during  the  term of
employment of the Executive and until all benefits  payable  hereunder have been
made.

                                   ARTICLE XV
                         INTERPRETATION OF THE AGREEMENT
                         --------------------------------

         The  Board  of  Directors  of the Bank  shall  have  sole and  absolute
discretion  to  administer,  construe,  and  interpret  the  Agreement,  and the
decisions of the Board shall be conclusive  and binding on all affected  parties
(unless such decisions are arbitrary and capricious).
<PAGE>

                                   ARTICLE XVI
                             ARBITRATION OF DISPUTES
                             -----------------------

         In the event that any dispute arises between the Executive and the Bank
as to the terms or  interpretation  of this  Agreement,  said  dispute  shall be
referred to the  American  Arbitration  Association,  and the parties  expressly
consent to submit said dispute to be so arbitrated. The decision of the American
Arbitration Association shall be final and binding on all the parties, and there
shall be no appeal therefrom.

                                  ARTICLE XVII
                            TERMINATION OF AGREEMENT
                            ------------------------

         The  Bank  and the  Executive  (or,  in the  event  of his  death,  his
Surviving Spouse or estate,  as the case may be) may terminate this Agreement at
any time in a writing executed by the parties.

<PAGE>

         IN WITNESS WHEREOF,  the Bank has caused this Agreement to be signed in
its corporate name by its duly authorized officer,  impressed with its corporate
seal,  and properly  attested to, and the Executive has hereto set his hand, all
on the day and year first above written.

                                        FIRST LANCASTER FEDERAL SAVINGS BANK

Attest:/s/ Kathy G. Johnica             By:/s/ Virginia R.S. Stump
        --------------------               ---------------------------------
                                            Its Chairman of the Board

                                        EXECUTIVE

Witness:/s/ Kathy G. Johnica            /s/ Tony A. Merida
        --------------------            ------------------------------------
                                        Tony A. Merida

<PAGE>
                   SUPPLEMENTAL EXECUTIVE RETIREMENT AGREEMENT
                                     BETWEEN
                      FIRST LANCASTER FEDERAL SAVINGS BANK
                                       AND
                                 TONY A. MERIDA
                                 FIRST AMENDMENT

     WHEREAS,  on December 7, 1995,  First  Lancaster  Federal Savings Bank (the
"Bank")  entered  into  a  Supplemental   Executive  Retirement  Agreement  (the
"Agreement") with Tony A. Merida (the "Employee"); and

     WHEREAS,  the  Board  of  Directors  of the  Bank  and  the  Employee  have
determined that it is in their best interests to amend the Agreement;

     NOW,  THEREFORE,  the  Agreement  shall be  amended as  follows,  with such
amendment to become effective immediately upon the execution hereof:

     1. The  definition of  "Compensation"  under Article I is amended by adding
the following phrase between the words "earnings" and "paid":

               --  excluding  W-2  earnings  from stock  option  and  management
recognition plans --.

     2. The second  sentence  of the  definition  of "Vested  Percentage"  under
Article I is amended by deleting "(i)" and ", or (ii) a Change in Control".

     3. The first  sentence of the second  paragraph of Article II is amended by
inserting the following phrase between the words "Benefits" and "exceeds":

                  , taken  together  with any  other  benefits  he will  receive
pursuant  to  other  compensation  arrangements  with  the  Bank or its  holding
company,

     4. The second  paragraph  of Article  VIII is  amended in its  entirety  to
provide as follows:

               The Bank shall establish the Trust (if it has not been previously
               established)  at any  time  no  later  than  five  business  days
               following a Change in Control,  and shall contribute an amount to
               the Trust that is projected to be  sufficient to enable the Trust
               to pay all Benefits that could become payable.

     5. Nothing  contained herein shall be held to alter,  vary or affect any of
the terms,  provisions,  or  conditions  of the  Agreement  other than as stated
above.

<PAGE>

         WHEREFORE,  the undersigned  hereby approve this First Amendment to the
Agreement.

Date of Execution: February 15, 1996

                                     TONY A. MERIDA

                                     /s/ Tony A. Merida
                                     -------------------------------------

                                     FIRST LANCASTER FEDERAL SAVINGS BANK

                                     By /s/ Virginia R.S. Stump
                                        ----------------------------------

Attest:/s/ Kathy G. Johnica          Its President
       -------------------------        ----------------------------------

<PAGE>
                   SUPPLEMENTAL EXECUTIVE RETIREMENT AGREEMENT

                                     BETWEEN

                      FIRST LANCASTER FEDERAL SAVINGS BANK

                                       AND

                                 TONY A. MERIDA

                                SECOND AMENDMENT
                                ----------------

     WHEREAS,  on December 7, 1995,  First  Lancaster  Federal Savings Bank (the
"Bank")  entered  into  a  Supplemental   Executive  Retirement  Agreement  (the
"Agreement") with Tony A. Merida (the "Employee"); and

     WHEREAS,  the  Board  of  Directors  of the  Bank  and  the  Employee  have
determined  that the  definition of "Annual Offset Amount" needs to be clarified
with  respect to  benefits  that are  payable to the  Employee  under the Bank's
Pension Plan.

     NOW,  THEREFORE,  the  Agreement  shall be  amended as  follows,  with such
Amendment to become effective immediately upon the execution thereof:

     1. The definition of "Annual Offset Amount" in Article I is amended to read
as follows:

                           "Annual  Offset Amount" shall mean the sum of (i) the
                  primary  social  security  benefit  payable  annually  to  the
                  Executive as of the earliest date,  following his  termination
                  of employment, on which he could begin to collect such benefit
                  (regardless of when such payment  actually  begins),  (ii) the
                  annual  benefit that would be payable to the  Executive  under
                  the Bank's Pension Plan as of the earliest date, following his
                  termination  of  employment,  in the form of a 50%  joint  and
                  survivor  annuity,  with his  Surviving  Spouse as  contingent
                  beneficiary,  on which he could begin to collect  such benefit
                  (regardless  of  when  he  actually  begins  to  collect  such
                  benefits),  and (iii) the annual  amount that would be payable
                  to the  Executive  if that  portion of his  account  under the
                  Bank's 401(k) Plan which would be  attributable  to the Bank's
                  contributions  (assuming the Executive contributed the maximum
                  amount  permitted by the Federal tax laws) were paid to him in
                  the  form  of a 50%  joint  and  survivor  annuity,  with  his
                  surviving  spouse as contingent  beneficiary,  commencing upon
                  his  termination of employment  regardless of when he actually
                  begins to collect such benefits.

     2. Nothing  contained herein shall be held to alter,  vary or affect any of
the terms, provisions or conditions of the Agreement other than as stated above.

     WHEREFORE,  the  undersigned  hereby  approve this Second  Amendment to the
Agreement.

Date: September 7, 2000         /s/ Tonay A. Merida
      -----------------         ------------------------------------
                                TONY A. MERIDA

                                FIRST LANCASTER FEDERAL SAVINGS BANK

                                By: Virginia R.S. Stump
                                    ---------------------------------------
Attest: /s/ Kathy G. Johnica
        --------------------
                                Its: President
                                    ---------------------------------------

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