Document:

<PAGE>
                                  Exhibit 10(h)

<PAGE>
                              EMPLOYMENT AGREEMENT

        THIS EMPLOYMENT AGREEMENT (the "Agreement") made and entered into as of
this 23d day of April, 2002, by and among DENNIS MORGAN, a resident of the State
of Alabama (the "Executive"), and FIRST SOUTHERN BANK, a banking corporation
organized under the laws of the State of Alabama (the "Bank").

                                   WITNESSETH:

        WHEREAS, the Bank and the Executive desire to enter into an employment
relationship with the other; and

        WHEREAS, the Bank and the Executive each deem it necessary and desirable
to execute a written document setting forth the terms and conditions of said
relationship.

        NOW, THEREFORE, in consideration of the employment of the Executive by
the Bank, of the mutual covenants, promises and agreements herein made, and of
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:

        1. Employment. The Bank hereby employs Executive's full-time services as
Executive Vice President and Senior Credit Officer of the Bank, commencing on
the first day that the Bank receives all requisite regulatory approvals for such
appointment (the "Commencement Date"). This Agreement shall be for a term of
three years, beginning on the Commencement Date. Executive hereby accepts such
employment. Executive shall diligently perform the duties customarily performed
by such officer, subject to the authority of the Board, and shall hold and
perform all of the responsibilities and duties prescribed by the Board and by
the Bylaws of the Bank. During the term of this Agreement, Executive will devote
his full time and effort to his duties hereunder, to the exclusion of all other
employment or business interests other than passive personal investments,
charitable, religious or civic activities.

        2. Base Salary. As compensation for his services to the Bank, the Bank
agrees to pay Executive a salary of Ninety-Five Thousand Dollars ($95,000.00) on
an annual basis beginning on April 23, 2002 until October 23, 2002. Beginning
October 23, 2002, the Bank agrees to pay Executive a salary of Ninety-Seven
Thousand Five Hundred Dollars ($97,500.00) on an annual basis. The salary shall
be paid in equal bi-weekly installments. Payment will be in accordance with the
Bank's payroll policies in effect from time to time.

        3. Benefits. The Bank agrees to provide Executive with the following
benefits commencing on April 23, 2002, or as soon thereafter as practicable, and
continuing for so long as Executive is employed under this Agreement or any
extension thereof

        (a) The Bank shall also provide for the Executive a $350.00 per month
    cafeteria plan benefit, which may be used by Executive to fund benefits
    selected by him, including major medical and hospitalization insurance. The
    Bank shall have the right to

<PAGE>
    obtain a term life insurance policy on the Executive for the benefit of the
    Bank up to an amount equal to twice his annual salary.

        (b) An annual paid vacation of three weeks.

        (c) A car allowance of $550 per month, or an equivalent lease
    arrangement, and all related operating and maintenance expenses.

        (d) Reimbursement of monthly dues and Bank related expenses of Executive
    at Turtle Point Country Club.

        (e) Reimbursement of expenses of Executive's use of a cellular
    telephone.

        (f) Other benefits as the Board may approve from time to time.

        4. Expenses. Executive is authorized to incur necessary and customary
expenses in connection with the business of the Bank, including expenses for
entertainment, trade association meetings, travel, promotion and similar
matters. The Bank will pay or reimburse Executive, pursuant to the Bank's
policy, for such expenses upon presentation by Executive of the appropriate
records which verify such expenses.

        5. Bonus. Executive shall receive a signing bonus in an amount equal to
(i) six months Turtle Point dues payable April 23, 2002, plus (ii) $6,500
payable by November 30, 2002. The Bank recognizes it is important that Executive
have a bonus incentive to encourage accomplishment of specified corporate goals,
as identified from time to time by the Board or a duly authorized committee of
the Board. The Board shall review Executive's performance against the specified
goals at least annually. Executive will be eligible for a bonus during calendar
year 2002, in the event that the Bank for fiscal year 2002 achieves an operating
profit (excluding Extraordinary Items), in an amount equal to 25% of his base
salary, payable in the first calendar quarter of 2003. The term "Extraordinary
Items" includes bond claim recoveries and tax benefit recoveries accrued on the
Bank's financial statements, but does not include provisions to the Bank's
allowance for loan and lease losses account. Executive will be eligible for a
bonus of up to 25% of his base salary in subsequent fiscal years, based on
criteria to be mutually agreed upon by the Board and the Executive.

        6. Stock Options and Stock Incentive Award.

        (a) The Executive shall be eligible to participate in the Stock Option
    Plan, and Executive will, within thirty days, be issued stock options,
    subject to the terms of the Stock Option Agreement between the Executive and
    the Company as provided in Exhibit A, which is attached hereto and
    incorporated herein by reference.

        (b} The Company hereby grants to Executive an incentive stock bonus of
    twenty five thousand (25,000) shares of common stock of the Company (the
    "Stock Bonus"), which Stock Bonus is contingent and shall only be earned as
    set out below. In the event that the per

                                       2

<PAGE>
    share price of the Company's common stock, as quoted on the OTC Bulletin
    Board or on another public market if the Company's stock is not quoted on
    the OTC Bulletin Board, closes at or above $6.00 per share for ten
    consecutive trading days at any time from three years from the date hereof
    to and including April 23, 2007, then the Stock Bonus shall be deemed to be
    earned by the Executive. The $6.00 per share target price shall be adjusted
    for stock , dividends, stock splits, stock combinations, recapitalization
    and other similar changes as referenced in Paragraph 5 of the Stock Option
    Agreement. The ten consecutive trading days requirement noted above will not
    be met if Executive has, directly or indirectly, purchased any of the
    Company's common stock during such ten consecutive trading days or during
    the ten trading days prior to such period.

        7. Severance.

        (a) If Executive becomes disabled or dies, he or his survivors will
    receive a severance payment in an amount equal to the Executive's annual
    salary at the time of termination payable in a lump sum upon termination,
    plus the benefits described in paragraph 3(a) of this Agreement for a period
    of one year.

        (b) If Executive is terminated "for cause" as defined in paragraph 10,
    Executive will receive no severance payment, and any other benefits
    described hereunder shall also terminate as of the termination date of
    employment.

        (c) If Executive is terminated "without cause", Executive will receive a
    severance payment in an amount equal to the Executive's annual salary at the
    time of termination payable in a lump sum upon termination, plus the
    benefits described in paragraph 3 of this Agreement for a one year period.

        (d) If Executive terminates his employment as a result of a Change of
    Control or is terminated as a result of a Change of Control, he will receive
    a severance payment in an amount equal to 2 1/2 times the Executive's annual
    salary at the time of termination payable in a lump sum upon termination,
    plus the benefits described in paragraph 3 of this Agreement for a 2 1/2
    year period.

        8. Termination. Except for the provisions of paragraphs 11 and 12, which
shall continue in full force and effect, this Agreement shall terminate upon the
first to occur of the following:

        (a) The death of Executive;

        (b) The permanent disability of Executive, as defined in paragraph 9;

        (c) Termination by the Bank "for cause" as defined in paragraph 10;

                                       3

<PAGE>
        (d) Termination by the Bank "without cause" or pursuant to a "Change in
    Control" as defined below. The Bank reserves the right to terminate the
    Executive at any time.

        (e) Termination by Executive; provided that Executive shall give not
    less than thirty (30) days' written notice of termination. Upon receipt of
    notice of intended termination given by Executive, the Bank reserves the
    right to terminate the Executive's employment effective immediately,
    provided that in such instance, except in the event of a Change in Control,
    the Bank shall pay an amount equal to Executive's Base Salary due for the
    remainder of the thirty (30) day notice period to the termination date, or
    thirty (30) days, whichever is less.

        (f) The end of the three year term provided for in paragraph l hereof.

    Subject to approval from the appropriate bank regulatory authorities, a
    "Change in Control" shall be deemed to occur upon the happening of any of
    the following events:

            (i) A sale or other disposition of substantially all of the assets
        of the Bank or First Southern Bancshares, Inc., a Delaware corporation,
        the Bank's parent company, (the "Company"), or a sale or disposition of
        the issued and outstanding common stock of the Bank or the Company in a
        single transaction or in a series of transactions to a single person or
        entity or group of affiliated persons or entities; or

            (ii) A merger or consolidation of the Bank or the Company with or
        into any other entity, if immediately after giving effect to such
        transaction more than fifty percent (50%) of the issued and outstanding
        common stock of the surviving entity of such transaction is held by a
        single person or entity or group of affiliated persons or entities who
        were not in control of the Bank or the Company prior to such
        transaction.

        9. Disability. Executive shall be considered to be permanently disabled
in the event that (a) Executive shall suffer permanent total disability as that
term is defined under the Alabama Workers' Compensation Law as in effect at the
time of such disability, and (b) either Executive or the Bank shall have given
the other party thirty (30) days' written notice of his or its intention to
terminate Executive's employment because of such disability. In the event that
Executive and the Bank are in material disagreement regarding Executive's
physical or mental condition, the Bank shall authorize a panel of three (3)
physicians selected by the Bank to examine Executive to conclusively determine
by a majority whether Executive is physically or mentally incapable hereunder.

        10. Termination for Cause. As used in paragraph 8(c), termination "for
cause" shall include, termination for Executive's use of illegal
non-prescription drugs or drug or alcohol addiction; acts of dishonesty or
infidelity; conviction of a felony; habitual neglect of duty; objectionable acts
or conduct as determined by the Bank's banking regulators; willful or gross
negligence in carrying out the activities for which employed; or in the event
that the Executive's

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<PAGE>
performance of his duties does not meet the standards required by the Bank's
regulators under the Consent Order or under any replacement order or agreement.

        11. Disclosure of Confidential Information. Executive acknowledges that
the Bank possesses certain methods of operation and information concerning its
business affairs, including customer lists and other customer information, which
are valuable, special and unique assets of its business. Without prior Board
approval, Executive agrees not to disclose, during or after the term of his
employment, any such information, or any part thereof to any bank, person, firm,
corporation, association or other entity for any reason or purpose whatsoever.

        12. Non-Compete/Non-Solicitation.

        (a) It is understood and agreed by parties to this Agreement that under
    the following conditions, Executive hereby agrees not to directly or
    indirectly compete with the Bank:

            (i) If Executive voluntarily resigns his position;

            (ii) If there is a Change of Control in the ownership of the Bank;
        or

            (iii) If Executive is terminated "without cause."

        (b) Executive hereby agrees that in the event of termination pursuant to
    paragraph 12(a)(i) or (ii), he will not compete with the Bank within the
    areas of Lauderdale and Colbert counties in Alabama (the "Non-Compete Area")
    for a period of 2 1/2 years from the date of termination. If the Executive
    is terminated under paragraph 12(a)(iii), then Executive hereby agrees not
    to compete within the Non-Compete Area for a period of one year from the
    date of termination.

        (c) Executive agrees that he will not solicit any of the Bank's
    employees to leave the services of the Bank for a period of two years from
    the date of termination. The nonsolicitation provision shall apply to any
    Bank employee during the period of such employee's employment with the Bank
    and for a period of 30 days after an employee's termination of employment
    with the Bank.

        (d) Executive can and may invest or purchase stock in any financial
    institution. However, Executive may not serve on the Board of Directors of
    any financial institution other than the Bank or act as a consultant or
    otherwise influence employees to join said institution during the term of
    this Agreement and for a period of 2 1/2 years from the date of termination
    as provided in paragraph 12(a)(i) or (ii) above or for a period of one (1)
    year from the date of termination as provided in paragraph 12(a)(iii) above.

        13. Assignment. The rights and obligations of the Bank and Executive
(except the Executive's obligations to perform services) under this Agreement
shall inure to the benefit of and shall be binding upon their respective
successors, if any. The rights and obligations of Executive under this Agreement
shall inure only to the benefit of Executive and are not

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<PAGE>
assignable by Executive to any other person or entity by virtue of the unique
and personal nature of Executive's services. It is agreed among the parties that
there shall be no third-party beneficiaries with standing to enforce this
Agreement.

        14. Bank's Conditions to Execution of Agreement. The execution of this
Agreement by the Bank is subject to authorization and ratification by its Board
of Directors at the next scheduled meeting, and the employment of Executive as
provided for herein is subject to prior approval of the Bank's primary
regulators.

        15. Entire Agreement. This Agreement contains the entire agreement
between the parties and supersedes all prior discussion, understanding and
commitments, whether oral or written. This Agreement cannot be amended or
modified except by subsequent written agreement signed by all parties hereto.

        16. Attorney's Fees and Costs. If an action at law or in equity is
necessary to enforce or interpret the terms of this Agreement, the prevailing
party shall be entitled to reasonable attorneys' fees, costs and necessary
disbursements in addition to any other relief to which he may be entitled.

        17. Controlling Law. This Agreement is being executed in and will be
performed in the State of Alabama and shall be construed, controlled and
interpreted according to the laws of Alabama.

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<PAGE>

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

                                        THE BANK:

                                        FIRST SOUTHERN BANK

                                        By: /s/ J. Acker Rogers
                                            -------------------------------

                                        Title: Chairman of the Board
                                               ----------------------------

                                        EXECUTIVE:

                                        /s/ Dennis W. Morgan
                                        -----------------------------------
                                        DENNIS MORGAN

<PAGE>
                        AMENDMENT TO EMPLOYMENT AGREEMENT

        This Amendment to Employment Agreement (the "First Amendment") made and
entered into as of this 14th day of June, 2002 by and among DENNIS MORGAN, a
resident of the State of Alabama (the "Executive") and FIRST SOUTHERN BANK, a
banking corporation organized under the laws of the State of Alabama ("First
Southern").

                                   WITNESSETH:

        WHEREAS, First Southern and the Executive entered into an Employment
Agreement dated April 23, 2001 (the "Employment Agreement"); and

        WHEREAS, the parties desire to amend the Employment Agreement as set
forth below.

        NOW THEREFORE, in consideration of the Employment Agreement and of the
mutual covenants, promises and agreements made therein and herein, and of other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:

        1. The following paragraph 18 is hereby appended to the end of the
Employment Agreement:

        Notwithstanding any other provision of this Agreement, all payments to
    Executive pursuant to this Agreement shall be subject to the Bank's
    compliance with 12 CFR 359 regarding Golden Parachute and Indemnification
    Payments.

        2. Except as provided by this Amendment, the parties hereby ratify and
confirm the terms of the Employment Agreement.

<PAGE>
        IN WITNESS WHEREOF, the parties have executed this Amendment as of the
date first above written.

                                        THE BANK:

                                        FIRST SOUTHERN BANK

                                        By: /s/ J. Acker Rogers
                                            ---------------------------------
                                            J. Acker Rogers, Chairman

                                        EXECUTIVE:

                                        /s/ Dennis W. Morgan
                                        -------------------------------------
                                        DENNIS MORGAN

                                        THE COMPANY

                                        FIRST SOUTHERN BANCSHARES, INC.

                                        BY: /s/ J. Acker Rogers
                                            ---------------------------------
                                            J. Acker Rogers, Chairman

                                        EXECUTIVE:

                                        /s/ Billy Jack Johnson, Jr.
                                        -------------------------------------
                                        BILLY JACK JOHNSON, JR.

<PAGE>
                    SECOND AMENDMENT TO EMPLOYMENT AGREEMENT

        This Second Amendment to Employment Agreement (the "Second Amendment")
made and entered into as of this 25th day of July, 2002 by and between DENNIS
MORGAN, a resident of the State of Alabama (the "Executive") and FIRST SOUTHERN
BANK, a banking corporation organized under the laws of the State of Alabama
("First Southern").

                                   WITNESSETH:

        WHEREAS, First Southern and the Executive entered into an Employment
Agreement dated April 23, 2002 (the "Employment Agreement"); and

        WHEREAS, the parties desire to amend the Employment Agreement as set
forth below.

        NOW THEREFORE, in consideration of the Employment Agreement and of the
mutual covenants, promises and agreements made therein and herein, and of other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:

        1. Paragraph 7 is hereby amended to delete paragraphs (c) and (d).

        2. Except as provided by this Amendment, the parties hereby ratify and
confirm the terms of the Employment Agreement.

        IN WITNESS WHEREOF, the parties have executed this Amendment as of the
date first above written.

                                        THE BANK:

                                        FIRST SOUTHERN BANK

                                        By: /s/ J. Acker Rogers
                                            ------------------------------------

                                        Name: J. Acker Rogers
                                              ----------------------------------

                                        Title: Chairman of the Board
                                               ---------------------------------

                                        EXECUTIVE:

                                        /s/ Dennis W. Morgan
                                        ---------------------------------------
                                        DENNIS MORGAN<PAGE>
                                  Exhibit 10(i)

<PAGE>
                             STOCK OPTION AGREEMENT

        THIS STOCK OPTION AGREEMENT ("Option") is entered into as of the 16th
day of May, 2002 ("Option Date") by and between FIRST SOUTHERN BANCSHARES, INC.,
a Delaware corporation, (the "Company"} and DENNIS MORGAN (the "Optionee").

                                  INTRODUCTION

        The Company adopted the 1996 Stock Option Plan (as amended and in effect
on the date hereof, the "Plan"), in order to attract, retain and motivate its
Employees and key personnel, providing them with an opportunity to purchase
Common Stock of the Company so as to give them a proprietary interest in the
Company. The Company's Board of Directors voted to grant Optionee an incentive
stock option pursuant to the Plan upon the terms and conditions hereinafter set
forth.

        1. Option Grant. The Company hereby grants to the Optionee the Option to
purchase from the Company twenty-five thousand (25,000) shares of Common Stock
of the Company at a purchase price of $2.00 share (the "Option Price"), which is
the fair market value of the Common Stock on the date of grant, pursuant to the
Plan.

        2. Term. The Option is exercisable (a) up to twenty percent (20%) of
this stock grant after May 1, 2003; (b) up to forty percent (40%) of this stock
grant after May 1, 2004; (c) up to sixty percent (60%) of this stock grant after
May 1, 2005; (d) up to eighty percent (80%) of this stock grant after May 1,
2006; (e) up to one hundred percent (100%) of this stock grant after May 1,
2007; (e) and in any event prior to May 1, 2009, at which time this Option, if
still in force, shall terminate.

        3. Other Conditions and Limitations.

        (a) The Option is granted on the condition that the purchase of Common
    Stock hereunder shall be for investment purposes and not with a view to
    resale or distribution, except that such condition shall be inoperative if
    the offering of Common Stock subject to the Option is registered under the
    1933 Act or if in the opinion of counsel for the Company such Stock may be
    resold without registration. At the time of the exercise of the Option or
    any installment thereof, the Optionee will execute such further agreements
    as the Company may require to implement the foregoing condition and to
    acknowledge the Optionee's familiarity with restrictions on the sale of the
    Shares under applicable securities laws.

        (b) The Company will furnish upon request of the Optionee copies of the
    Certificate of Incorporation of the Company, as amended, and By-Laws of the
    Company and such publicly available financial and other information
    concerning the Company and its business and prospects as may be reasonably
    requested by the Optionee in connection with the exercise of the Option.

<PAGE>
        (c) The Option shall not be transferable otherwise than by will or by
    the laws of descent and distribution, and the Option shall be exercisable
    during the lifetime of the Optionee by the Optionee only. More particularly
    (but without limiting the generality of the foregoing), the Option may not
    be assigned, transferred (except as provided above), pledged or hypothecated
    in any way and shall not be subject to execution, attachment or similar
    process, and any attempt to do so shall be null and void and without effect.

        (d) The Option may not be exercised while there is outstanding any
    incentive stock option that was granted to the Optionee before the granting
    of the Option and that permits the Optionee to purchase any stock of the
    Company.

        4. Exercise of Option. The Option shall be exercisable only by delivery
of a written notice by the Optionee in person or by United States Registered or
Certified Mail, Return Receipt Requested, to the Company at its principal
office. Payment for the Shares shall be tendered in full with the notice and
shall be made either (a) in cash, (b) by check, (c) if permitted by the Board of
Directors, by delivery and assignment to the Company of shares of Company Stock
having a fair market value on the date of exercise as determined by the Board of
Directors of the Company equal to the exercise price, or (d) by a combination of
(a), (b), and (c).

        5. Stock Dividends; Stock Splits; Stock Combinations; Recapitalization.
The number, kind and Option Price of the shares covered by this Option shall be
automatically appropriately adjusted to give effect to any stock dividends,
stock splits, stock combinations, recapitalization and other similar changes in
the capital structure of the Company after the grant of the Option.

        6. Merger; Sale of Assets; Dissolution. In the event of a merger or
similar reorganization as to which the Company is the surviving corporation, the
number, kind and Option price of the shares then subject to the Option may be
adjusted as determined by the Board of Directors. In order to permit the
Optionee acquiring shares upon exercise of an Option to participate, as a
shareholder of the Company, (a) in a merger in which the Company does not
survive, a sale of substantially all of the assets of the Company, or a sale of
at least a majority of the issued and outstanding capital Stock of the Company,
with or to any persons) or entity(ies) not controlling, controlled by or under
common control with the Company, or (b) in a liquidation of the Company, the
Company will use its best efforts to give advance notice of any such event to
Optionee.

        7. Termination of Option. In the event that the Optionee ceases for any
reason to be an Employee of the Company at any time prior to exercise of the
Option in full, the Option shall terminate in accordance with the following
provisions:

        (a) If the Optionee's Employment shall have been terminated because of
    Optionee's disability within the meaning of Section 22(e)(3) of the Code or
    Optionee's death, the Optionee, or his estate or personal representative may
    at any time within a period of six

                                       2

<PAGE>
    months after such termination of employment, exercise the Option to the
    extent that the Option was exercisable on the date of termination of the
    Optionee's Employment; and

        (b) If the Optionee's Employment shall have been terminated, for any
    reason other than such disability or death, the Optionee may at any time
    within a period of three months after such termination of Employment
    exercise the Option to the extent it was exercisable on the date of
    termination of the Optionee's Employment; provided however, that the Option
    may not be exercised to any extent by anyone after the date of expiration of
    the Option as described in Paragraph 2.

        8. Notice of Disposition of Shares. The Optionee hereby agrees to notify
the Company within seven (7) days if the Optionee disposes of any shares of
Common Stock acquired on the exercise of the Option within one year after the
exercise of the Option.

        9. Rights as Shareholder. The Optionee shall have no rights as a
shareholder with respect to the shares subject to the Option until the exercise
of the Option and the issuance of a stock certificate. No certificates for
Shares which are not eligible for receipt pursuant to the provisions of
Paragraph 2 will be issued.

        10. Miscellaneous. Nothing herein contained shall impose any obligation
on the Company or the Optionee with respect to the Optionee's continued
relationship with the Company or upon the Optionee to exercise the Option. The
Company makes no representation as to the tax treatment to the Optionee upon
receipt or exercise of the Option or sale or other disposition of the Shares
covered by the Option. The Company in its discretion may cause to be made, as a
condition precedent to the payment of any cash or stock, appropriate
arrangements for the withholding of any federal, state, local or foreign taxes.

        11. Relationship to Plan. The Option has been granted pursuant to the
Plan, as amended and in effect on the date hereof, and is in all respects
subject to its terms, conditions and definitions. The Optionee hereby accepts
the Option subject to all of the terms and provisions of the Plan and agrees
that all decisions under and interpretations of the Plan by the Board of
Directors shall be final, binding and conclusive upon the Optionee, his heirs
and his legal representatives.

        12. Governing Law. This Agreement shall be subject to and construed in
accordance with the laws of the State of Delaware.

        13. Legends; Stop Transfer. The following legends shall appear on each
Certificate issued pursuant to this Agreement:

     THE SHARE OR SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
     RESTRICTIONS ON TRANSFER CONTAINED IN THE STOCK OPTION AGREEMENT PURSUANT
     TO WHICH THIS CERTIFICATE HAS BEEN ISSUED, A COPY OF WHICH IS ON FILE IN
     THE PRINCIPAL OFFICE OF THE COMPANY

                                       3

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     AND WILL BE FURNISHED BY THE COMPANY UPON REQUEST WITHOUT CHARGE.

     THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
     SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), AND MAY NOT BE TRANSFERRED
     IN THE ABSENCE OF SUCH REGISTRATION OR AN OPINION OF COUNSEL ACCEPTABLE TO
     THE COMPANY THAT SUCH TRANSFER WILL NOT REQUIRE REGISTRATION UNDER SUCH
     ACT.

     To ensure compliance with the terms of this Agreement, the Company may
     issue to its Transfer Agent appropriate stop transfer instructions with
     respect to the Shares purchased by the Optionee pursuant to this Option.

        14. Certain Definitions. The following terms when used in this Option
have the following meanings, unless otherwise expressly indicated:

        (a) "Board of Directors" means the Board of Directors of the Company or
    a committee thereof which has been delegated authority to take action for
    the Board with respect to this Option.

        (b) "Code" means the Internal Revenue Code of 1986, as amended.

        (c) "Common Stock" means the $.O1 par value Common Stock of the Company.

        (d) "Employee" means a full-time employee of the Company as determined
    under ss. 3401(c) of the Code and the regulations thereunder.

        (e) "Employment" means the continued relationship of an Employee with
    the Company, it being agreed that the cessation of services by such Employee
    for a period of more than twelve (12) successive months shall be deemed a
    termination of Employment for purposes of this Option.

        (f) "1933 Act" means the Securities Act of 1933, as amended.

        (g) "Plan" means the Company's 1996 Stock Option Plan, as amended and in
    effect on the date hereof.

        (h) "Shares" shall mean those shares of Company Common Stock that are
    purchased by the Optionee pursuant to this Option.

                                       4

<PAGE>
        IN WITNESS WHEREOF, the Company and the Optionee have executed this
Agreement in duplicate as of the 16th day of May, 2002.

                                        COMPANY:

                                        FIRST SOUTHERN BANCSHARES, INC.

                                        By: /s/ J. Acker Rogers
                                            --------------------------------

                                        Title: Chairman of the Board
                                               -----------------------------

                                        OPTIONEE:

                                        /s/ Dennis W. Morgan
                                        ------------------------------------
                                        DENNIS MORGAN

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