Document:

<PAGE>
                                                                   EXHIBIT 10.85

                                                       Service Package No: 34007
                                                                 Amendment No: 0

                         GAS TRANSPORTATION AGREEMENT
                      (For Use under FT-A Rate Schedule)

       THIS AGREEMENT is made and entered into as of the 2 day of November,
2000, by and between TENNESSEE GAS PIPELINE COMPANY, a Delaware Corporation,
hereinafter referred to as "Transporter" and CHATTANOOGA GAS CO, a TENNESSEE
Corporation, hereinafter referred to as "Shipper."  Transporter and Shipper
shall collectively be referred to herein as the "Parties."

                            ARTICLE I - DEFINITIONS

1.1    TRANSPORTATION QUANTITY - shall mean the maximum daily quantity of gas
       which Transporter agrees to receive and transport on a firm basis,
       subject to Article II herein, for the account of Shipper hereunder on
       each day during each year during the term hereof, which shall be 39792
       dekatherms. Any limitations on the quantities to be received from each
       Point of Receipt and/or delivered to each Point of Delivery shall be as
       specified on Exhibit "A" attached hereto.

1.2    EQUIVALENT QUANTITY - shall be as defined in Article I of the General
       Terms and Conditions of Transporter's FERC Gas Tariff.

                          ARTICLE II - TRANSPORTATION

Transportation Service - Transporter agrees to accept and receive daily on a
firm basis, at the Point(s) of Receipt from Shipper or for Shipper's account
such quantity of gas as Shipper makes available up to the Transportation
Quantity, and to deliver to or for the account of Shipper to the Point(s) of
Delivery an Equivalent Quantity of gas.

                ARTICLE III - POINT(S) OF RECEIPT AND DELIVERY

The Primary Point(s) of Receipt and Delivery shall be those points specified on
Exhibit "A" attached hereto.

                                  ARTICLE IV

All facilities are in place to render the service provided for in this
Agreement.

       ARTICLE V - QUALITY SPECIFICATIONS AND STANDARDS FOR MEASUREMENT

For all gas received, transported and delivered hereunder the Parties agree to
the Quality Specifications and Standards for Measurement as specified in the
General Terms and Conditions of Transporter's FERC Gas Tariff Volume No. 1. To
the extent that no new measurement facilities are installed to provide service
hereunder, measurement operations will continue in the manner in which they have
previously been handled. In the event that such facilities are not operated by
Transporter or a downstream pipeline, then responsibility for operations shall
be deemed to be Shipper's.

              ARTICLE VI - RATES AND CHARGES FOR GAS TRANSPORTATION

6.1  TRANSPORTATION RATES - Commencing upon the effective date hereof, the
     rates, charges, and surcharges to be paid by Shipper to Transporter for the
     transportation service provided herein shall be in accordance with
     transporter's Rate Schedule FT-A and the General Terms and Conditions of
     Transporter's FERC Gas Tariff. Except as provided to the contrary in any
     written or electronic agreement(s) between Transporter and Shipper in
     effect during the term of this Agreement, Shipper shall pay Transporter the
     applicable maximum

<PAGE>

                                                       Service Package No: 34007
                                                                 Amendment No: 0

          rate(s) and all other applicable charges and surcharges specified in
          the Summary of Rates in Transporter's FERC Gas Tariff and in this Rate
          Schedule. Transporter and Shipper may agree that a specific discounted
          rate will apply only to certain volumes under the agreement.
          Transporter and Shipper may agree that a specified discounted rate
          will apply only to specified volumes (MDQ, TQ, commodity volumes,
          Extended Receipt and Delivery Service Volumes or Authorized Overrun
          volumes) under the Agreement; that a specified discounted rate will
          apply only if specified volumes are achieved (with the maximum rates
          applicable to volumes above the specified volumes or to all volumes if
          the specified volumes are never achieved); that a specified discounted
          rate will apply only during specified periods of the year or over a
          specifically defined period of time; and/or that a specified
          discounted rate will apply only to specified points, zones, markets or
          other defined geographical area. Transporter and Shipper may agree to
          a specified discounted rate pursuant to the provisions of this Section
          6.1 provided that the discounted rate is between the applicable
          maximum and minimum rates for this service.

     6.2  INCIDENTAL CHARGES - Shipper agrees to reimburse Transporter for any
          filing or similar fees, which have not been previously paid for by
          Shipper, which Transporter incurs in rendering service hereunder.

     6.3  CHANGES IN RATES AND CHARGES - Shipper agrees that Transporter shall
          have the unilateral right to file with the appropriate regulatory
          authority and make effective changes in (a) the rates and charges
          applicable to service pursuant to Transporter's Rate Schedule FT-A,
          (b) the rate schedule(s) pursuant to which service hereunder is
          rendered, or (c) any provision of the General Terms and Conditions
          applicable to those rate schedules. Transporter agrees that Shipper
          may protest or contest the aforementioned filings, or may seek
          authorization from duly constituted regulatory authorities for such
          adjustment of Transporter's existing FERC Gas Tariff as may be found
          necessary to assure Transporter just and reasonable rates.

                      ARTICLE VII - BILLINGS AND PAYMENTS

     Transporter shall bill and Shipper shall pay all rates and charges in
     accordance with Articles V and VI, respectively, of the General Terms and
     Conditions of the FERC Gas Tariff.

                  ARTICLE VIII - GENERAL TERMS AND CONDITIONS

     This Agreement shall be subject to the effective provisions of
     Transporter's Rate Schedule FT-A and to the General Terms and Conditions
     incorporated therein, as the same may be changed or superseded from time to
     time in accordance with the rules and regulations of the FERC.

                            ARTICLE IX - REGULATION

     9.1  This Agreement shall be subject to all applicable and lawful
          governmental statutes, orders, rules and regulations and is contingent
          upon the receipt and continuation of all necessary regulatory
          approvals or authorizations upon terms acceptable to Transporter. This
          Agreement shall be void and of no force and effect if any necessary
          regulatory approval is not so obtained or continued. All Parties
          hereto shall cooperate to obtain or continue all necessary approvals
          or authorizations, but no Party shall be liable to any other Party for
          failure to obtain or continue such approvals or authorizations.

     9.2  The transportation service described herein shall be provided subject
          to Subpart G, Part 284 of the FERC Regulations.

<PAGE>

                                                       Service Package No: 34007
                                                                 Amendment No: 0

               ARTICLE X - RESPONSIBILITY DURING TRANSPORTATION

Except as herein specified, the responsibility for gas during transportation
shall be as stated in the General Terms and Conditions of Transporter's FERC Gas
Tariff Volume No. 1.

                            ARTICLE XI - WARRANTIES

11.1  In addition to the warranties set forth in Article IX of the General Terms
      and Conditions of Transporter's FERC Gas Tariff, Shipper warrants the
      following:

      (a)  Shipper warrants that all upstream and downstream transportation
           arrangements are in place, or will be in place as of the requested
           effective date of service, and that it has advised the upstream and
           downstream transporters of the receipt and delivery points under this
           Agreement and any quantity limitations for each point as specified on
           Exhibit "A" attached hereto. Shipper agrees to indemnify and hold
           Transporter harmless for refusal to transport gas hereunder in the
           event any upstream or downstream transporter fails to receive or
           deliver gas as contemplated by this Agreement.

      (b)  Shipper agrees to indemnify and hold Transporter harmless from all
           suits, actions, debts, accounts, damages, costs, losses and expenses
           (including reasonable attorneys fees) arising from or out of breach
           of any warranty by Shipper herein.

11.2  Transporter shall not be obligated to provide or continue service
      hereunder in the event of any breach of warranty.

                              ARTICLE XII - TERM

12.1  This contract shall be effective as of 2 November, 2000 and shall remain
      in force and effect, unless modified as per Exhibit B, until 1 November,
      2005 ("Primary Term") and on a month to month basis thereafter unless
      terminated by either Party upon at least thirty (30) days prior written
      notice to the other Party; provided, however, that if the Primary Term is
      one year or more, then any rights to Shipper's extension of this Agreement
      after the Primary Term shall be governed by Article III, Section 10.4 of
      the General Terms and Conditions of Transporter's FERC Gas Tariff,
      provided further, if the FERC or other governmental body having
      jurisdiction over the service rendered pursuant to this Agreement
      authorizes abandonment of such service, this Agreement shall terminate on
      the abandonment date permitted by the FERC or such other governmental
      body.

12.2  Any portions of this Agreement necessary to resolve or cash out imbalances
      under this Agreement as required by the General Terms and Conditions of
      Transporter's Tariff shall survive the other parts of this Agreement until
      such time as such balancing has been accomplished; provided, however, that
      Transporter notifies Shipper of such imbalance not later than twelve
      months after the termination of this Agreement.

12.3  This Agreement will terminate automatically upon written notice from
      Transporter in the event Shipper fails to pay all of the amount of any
      bill for service rendered by Transporter hereunder in accord with the
      terms and conditions of Article VI of the General Terms and Conditions of
      Transporter's FERC Gas Tariff.

                             ARTICLE XIII - NOTICE

<PAGE>

                                                       Service Package No: 34007
                                                                 Amendment No: 0

Except as otherwise provided in the General Terms and Conditions applicable to
this Agreement, any notice under this Agreement shall be in writing and mailed
to the post office address of the Party intended to receive the same, as
follows:

             TRANSPORTER:    Tennessee Gas Pipeline Company
                             P.O. Box 2511
                             Houston, Texas 77252-2511

                             Attention: Director, Transportation Control

             SHIPPER:
                NOTICES:     CHATTANOOGA GAS CO
                             C/O ATLANTA GAS LIGHT COMPANY
                             P.O. BOX 4569
                             ATLANTA, GA, USA-303024569

                             Attention: DENISE DOTSON/GINA GUINN

                BILLING:     ATLANTA GAS LIGHT CO
                             1219 CAROLINE STREET, NE

                             ATLANTA, GA, USA-30307

                             Attention: ANDY HAMILTON

or to such other address as either Party shall designate by formal written
notice to the other.

                           ARTICLE XIV - ASSIGNMENTS

14.1    Either Party may assign or pledge this Agreement and all rights and
        obligations hereunder under the provisions of any mortgage, deed of
        trust, indenture, or other instrument which it has executed or may
        execute hereafter as security for indebtedness. Either Party may,
        without relieving itself of its obligation under this Agreement, assign
        any of its rights hereunder to a company with which it is affiliated.
        Otherwise, Shipper shall not assign this Agreement or any of its rights
        hereunder, except in accord with Article III, Section 11 of the General
        Terms and Conditions of Transporter's FERC Gas Tariff.

14.2    Any person which shall succeed by purchase, merger, or consolidation to
        the properties, substantially as an entirety, of either Party hereto
        shall be entitled to the rights and shall be subject to the obligations
        of its predecessor in interest under this Agreement.

                          ARTICLE XV - MISCELLANEOUS

15.1    THE INTERPRETATION AND PERFORMANCE OF THIS CONTRACT SHALL BE IN
        ACCORDANCE WITH AND CONTROLLED BY THE LAWS OF THE STATE OF TEXAS,
        WITHOUT REGARD TO THE DOCTRINES GOVERNING CHOICE OF LAW.

15.2    If any provision of this Agreement is declared null and void, or
        voidable, by a court of competent jurisdiction, then that provision will
        be considered severable at either Party's option; and if the
        severability option is exercised, the remaining provisions of the
        Agreement shall remain in full force and effect.

15.3    Unless otherwise expressly provided in this Agreement or Transporter's
        Gas Tariff, no modification of or supplement to the terms and provisions
        stated in this Agreement shall be

<PAGE>

                                                       Service Package No: 34007
                                                                 Amendment No: 0

     or become effective until Shipper has submitted a request for change
     through PASSKEY and Shipper has been notified through PASSKEY of
     Transporter's agreement to such change.

15.4 Exhibit "A" attached hereto is incorporated herein by reference and made a
     part hereof for all purposes.

     IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be
duly executed as of the date first hereinabove written.

                    TENNESSEE GAS PIPELINE COMPANY

                    BY: _________________________________
                           Agent and Attorney-in-Fact

                    CHATTANOOGA GAS CO

                    BY: _________________________________

                    TITLE:_______________________________

                    DATE:________________________________
<PAGE>

                                  EXHIBIT "A"
                        TO GAS TRANSPORTATION AGREEMENT
                            DATED November 2, 2000
                                    BETWEEN
                        TENNESSEE GAS PIPELINE COMPANY
                                      AND
                              CHATTANOOGA GAS CO

         CHATTANOOGA GAS CO
         EFFECTIVE DATE OF AMENDMENT: November 2, 2000
         RATE SCHEDULE: FT-A
         SERVICE PACKAGE: 34007
         SERVICE PACKAGE TQ: 39792 Dth

<TABLE>
<CAPTION>
METER    METER NAME                  INTERCONNECT PARTY NAME           COUNTY        ST    ZONE   R/D   LEG   TOTAL-TQ  BILLABLE-TQ
-----------------------------------------------------------------------------------------------------------------------------------
<S>      <C>                         <C>                               <C>           <C>   <C>    <C>   <C>   <C>       <C>
001437   BRAZOS BLOCK 397            TRANSCONTINENTAL GAS PIPE LINE    OFFSHORE-     OT    OO     R     100   1519      1519
                                     CORP                              FEDERAL 704

010503   NEWFIELD-E CAMERON BLK 62A  NEWFIELD EXPLORATION CO           OFFSHORE-     OL    OL     R     800   1034      1034
                                                                       FEDERAL 703

010671   TRIDENT - LOWRY PLT DEHYD   DYNEGY MIDSTREAM SERVICES         CAMERON       LA    OL     R     800   595       595
                                     L.P.

010932   SHIP SHOAL 154 E            DEVON ENERGY PRODUCTION           OFFSHORE-     OL    OL     R     500   6082      6082
                                     COMPANY, L.P.                     FEDERAL 711

011119   SOUTH MARSH ISLAND 61 C     CHEVRON USA INC                   OFFSHORE-     OL    OL     R     500   858       858
                                                                       FEDERAL 707

011220   EUGENE ISLAND 365 A         DEVON ENERGY PRODUCTION           OFFSHORE-     OL    OL     R     500   555       555
                                     COMPANY, L.P.                     FEDERAL 710

011422   SOUTH MARSH ISLAND 260      CALLON PETROLEUM OPERATING        OFFSHORE-     OL    OL     R     800   1403      1403
                                     COMPANY                           FEDERAL 707

011802   SHIP SHOAL 198-J            DEVON ENERGY PRODUCTION           OFFSHORE-     OL    OL     R     500   2363      2363
                                     COMPANY, L.P.                     FEDERAL 711

011911   WHARTON COUNTY TRANS        PG&E TEXAS PIPELINE, L.P.         WHARTON       TX    OO     R     100   2401      2401
         EXCHANGE

011971   CHEVRON - SOUTH MARSH       CHEVRON USA INC                   OFFSHORE-     OL    OL     R     500    556       556
         ISLAND 78-B                                                   FEDERAL 707
</TABLE>
<PAGE>

<TABLE>
<S>       <C>                                     <C>                                  <C>          <C>  <C> <C> <C>   <C>    <C>
012020    TRANSCO - FALFURRIAS TRANSPORT          TRANSCONTINENTAL GAS PIPELINE        JIM WELLS    TX   00  R   100      22     22
                                                  CORP

012024    SAMSON - PRAIRIE-EAST CAMERON BLK 17    SAMSON RESOURCES CO                  OFFSHORE-
                                                                                       FEDERAL 703  OL   0L  R   800    1858   1858

012088    VALERO - MONTE CHRISTO EXCHANGE         PG&E TEXAS PIPELINE, L.P.            HIDALGO      TX   00  R   100    7148   7148

020042    EAST LOBELVILLE TENNESSEE  (75-3201)    EAST TENNESSEE NATURAL GAS           PERRY        TN   01  D   100   20898  20898
                                                  COMPANY

020289    GREENBRIER TENNESSEE #2 (Dual 753101)   EAST TENNESSEE NATURAL GAS           ROBERTSON    TN   01  D   500   18894  18894
                                                  COMPANY

070017    TGP - BEAR CREEK STOR WITHDRAWAL                                             BIENVILLE    LA   01  R   100   13398  13398

                                                                                                  Total Receipt TQ     39792  39792
                                                                                                  Total Delivery TQ    39792  39792
</TABLE>

          NUMBER OF RECEIPT POINTS: 14
          NUMBER OF DELIVERY POINTS: 2

Note: Exhibit "A" is a reflection of the contract and all amendments as of the
amendment effective date.EXHIBIT 10.1

<PAGE>

                          FORM OF EMPLOYMENT AGREEMENT
                          ----------------------------
                              AMENDED AND RESTATED

         THIS AGREEMENT  entered into this 17 th day of April,  2000 ("Effective
Date") by and between  Heritage Savings Bank,  F.S.B.  (the "Bank") and Peggy J.
Stewart (the "Employee").

         WHEREAS,  the  Employee  has  heretofore  been  employed by the Bank as
President and is experienced in all phases of the business of the Bank; and

         WHEREAS, the parties have previously enter into an Employment Agreement
dated December 11, 1995, as subsequently amended and renewed; and

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

         NOW, THEREFORE, it is AGREED as follows:

         1.  Employment.  The  Employee  is  employed  in  the  capacity  as the
             -----------
President  of the Bank.  The  Employee  shall  render  such  administrative  and
management  services  to the Bank and WHG  Bancshares  Corporation,  its  parent
savings and loan holding company ("Parent") as are currently rendered and as are
customarily  performed by persons situated in a similar executive capacity.  The
Employee shall promote the business of the Bank and Parent. The Employee's other
duties  shall be such as the  Board of  Directors  for the Bank  (the  "Board of
Directors" or "Board") may from time to time reasonably direct, including normal
duties as an officer of the Bank.

         2. Base  Compensation.  The Bank agrees to pay the Employee  during the
            -------------------
term of this  Agreement a salary at the rate of $         per annum,  payable in
                                                 --------
cash not less  frequently than monthly;  provided,  that the rate of such salary
shall be reviewed by the Board of Directors  not less often than  annually,  and
Employee shall be entitled to receive annually an increase at such percentage or
in such an amount as the Board of Directors in its sole discretion may decide at
such time.

         3.  Discretionary  Bonus. The Employee shall be entitled to participate
             ---------------------
in an equitable manner with all other senior management employees of the Bank in
discretionary  bonuses  that may be  authorized  and  declared  by the  Board of
Directors  to its  senior  management  employees  from  time to  time.  No other
compensation provided for in this Agreement shall be deemed a substitute for the
Employee's  right  to  participate  in such  discretionary  bonuses  when and as
declared by the Board of Directors.

<PAGE>

         4. (a)  Participation  in Retirement  and Medical  Plans.  The Employee
                 -------------------------------------------------
shall be entitled to  participate  in any plan of the Bank  relating to pension,
profit-sharing,   or  other   retirement   benefits  and  medical   coverage  or
reimbursement plans that the Bank may adopt for the benefit of its employees.

            (b) Employee  Benefits; Expenses. The Employee  shall be eligible to
             ------------------------------
participate in any fringe benefits which may be or may become  applicable to the
Bank's senior management employees,  including by example,  participation in any
stock  option or  incentive  plans  adopted by the Board of Directors of Bank or
Parent, club memberships,  a reasonable expense account,  and any other benefits
which are commensurate with the  responsibilities  and functions to be performed
by the Employee under this Agreement.  The Bank shall reimburse Employee for all
reasonable  out-of-pocket expenses which Employee shall incur in connection with
her service for the Bank.

         5. Term. The term of employment of Employee under this Agreement  shall
            -----
be for the period  commencing on the Effective Date and ending  thirty-six  (36)
months thereafter, as of April 17, 2003 ("Term").  Additionally,  on each annual
anniversary  date from the Effective  Date,  the term of  employment  under this
Agreement  shall be extended for an  additional  one year period beyond the then
effective  expiration date upon a  determination  and resolution of the Board of
Directors  that the  performance  of the Employee has met the  requirements  and
standards of the Board, and that the term of such Agreement shall be extended.

         6.   Loyalty; Noncompetition.
              ------------------------

         (a) The  Employee  shall  devote  her full  time and  attention  to the
performance  of  her  employment  under  this  Agreement.  During  the  term  of
Employee's employment under this Agreement, the Employee shall not engage in any
business or activity  contrary to the business  affairs or interests of the Bank
or Parent.

         (b) Nothing  contained  in this Section 6 shall be deemed to prevent or
limit the right of Employee to invest in the capital  stock or other  securities
of any  business  dissimilar  from that of the Bank or Parent,  or,  solely as a
passive or minority investor, in any business.

         7.  Standards.  The  Employee  shall  perform  her  duties  under  this
             ----------
Agreement in accordance  with such  reasonable  standards  expected of employees
with comparable positions in comparable  organizations and as may be established
from time to time by the Board of Directors.

         8. Vacation and Sick Leave.  At such  reasonable  times as the Board of
            ------------------------
Directors  shall in its  discretion  permit,  the  Employee  shall be  entitled,
without loss of pay, to absent herself

                                       2
<PAGE>

voluntarily  from the performance of her employment  under this Agreement,  with
all such voluntary absences to count as vacation time; provided that:

         (a) The  Employee  shall  be  entitled  to  annual  vacation  leave  in
accordance  with the policies as are  periodically  established  by the Board of
Directors for senior management employees of the Bank.

         (b) The  Employee  shall not be  entitled  to  receive  any  additional
compensation  from the Bank on account of her failure to take vacation leave and
Employee  shall not be entitled to  accumulate  unused  vacation from one fiscal
year to the next, except in either case to the extent authorized by the Board of
Directors for senior management employees of the Bank.

         (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 Bank for such additional periods of time and for such
valid and  legitimate  reasons as the Board of Directors in its  discretion  may
determine.  Further,  the Board of  Directors  shall be entitled to grant to the
Employee a leave or leaves of absence  with or without pay at such time or times
and upon such terms and  conditions as the Board of Directors in its  discretion
may determine.

         (d) In addition, the Employee shall be entitled to an annual sick leave
benefit as established by the Board of Directors for senior management employees
of the Bank.  In the event that any sick leave  benefit shall not have been used
during any year, such leave shall accrue to subsequent  years only to the extent
authorized by the Board of Directors for employees of the Bank.

         9.       Termination and Termination Pay.
                  -------------------------------

         The Employee's employment under this Agreement shall be terminated upon
any of the following occurrences:

         (a) The death of the  Employee  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 Employee's
death shall have occurred.

         (b) The Board of Directors may terminate the  Employee's  employment at
any time, but any termination by the Board of Directors  other than  termination
for Just Cause,  shall not prejudice the  Employee's  right to  compensation  or
other benefits under the Agreement.  The Employee shall have no right to receive
compensation or other benefits for any period after  termination for Just Cause.
Termination for "Just Cause" shall include termination because of the Employee's
personal dishonesty,  incompetence, willful misconduct, breach of fiduciary duty
involving personal

                                       3
<PAGE>

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 the
Agreement.

         (c) Except as  provided  pursuant  to  Section 12 herein,  in the event
Employee's  employment  under  this  Agreement  is  terminated  by the  Board of
Directors without Just Cause, the Bank shall be obligated to continue to pay the
Employee  the salary  provided  pursuant to Section 2 herein,  up to the date of
termination  of the term  (including any renewal term) of this Agreement and the
cost of Employee  obtaining all health,  life,  disability,  and other  benefits
which the Employee  would be eligible to  participate in through such date based
upon the benefit levels  substantially equal to those being provided Employee at
the date of termination of employment,  but in neither case for a period of less
than one year from the date of termination of employment.

         (d) If the  Employee  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) and (g)(1)), all obligations of the Bank under this Agreement
shall terminate, as of the effective date of the order, but the vested rights of
the parties shall not be affected.

         (e) 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,
but this  paragraph  shall not  affect  any  vested  rights  of the  contracting
parties.

         (f) All obligations under this Agreement shall be terminated, except to
the extent  determined that  continuation of this Agreement is necessary for the
continued  operation  of the Bank:  (i) by the  Director of the Office of Thrift
Supervision  ("Director of OTS"),  or his or her designee,  at the time that the
Federal  Deposit  Insurance  Corporation  ("FDIC")  enters into an  agreement to
provide assistance to or on behalf of the Bank under the authority  contained in
Section  13(c)  of  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. Any rights of the parties that have already vested,
however, shall not be affected by such action.

         (g) The voluntary  termination by the Employee  during the term of this
Agreement  with the delivery of no less than 60 days written notice to the Board
of Directors,  other than pursuant to Section 12(b),  in which case the Employee
shall be entitled  to receive  only the  compensation,  vested  rights,  and all
employee benefits up to the date of such termination.

                                       4
<PAGE>

         (h) Notwithstanding  anything herein to the contrary, any payments made
to the Employee pursuant to the Agreement, or otherwise, shall be subject to and
conditioned   upon  compliance  with  12  USC  ss.1828(k)  and  any  regulations
promulgated thereunder.

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

         11. Disability.  If the Employee shall become disabled or incapacitated
             -----------
to the extent that she is unable to perform her duties  hereunder,  by reason of
medically determinable physical or mental impairment,  as determined by a doctor
engaged by the Board of Directors,  Employee shall be eligible for such benefits
as provided  during such period under the  provisions  of  disability  insurance
coverage  in effect  for Bank  employees.  Upon  returning  to active  full-time
employment,  the  Employee's  full  compensation  as set forth in this Agreement
shall be reinstated as of the date of  commencement of such  activities.  In the
event that the Employee  returns to active  employment on other than a full-time
basis, then her compensation (as set forth in Section 2 of this Agreement) shall
be  reduced in  proportion  to the time  spent in said  employment,  or as shall
otherwise be agreed to by the parties.

         12.      Change in Control.
                  -----------------
         (a) Notwithstanding any provision herein to the contrary,  in the event
of the involuntary  termination of Employee's employment during the term of this
Agreement  following  any Change in Control of the Bank or Parent,  absent  Just
Cause,  Employee shall be paid an amount equal to the product of three (3) times
the  Employee's  "base amount" as defined in Section  280G(b)(3) of the Internal
Revenue  Code of 1986,  as amended  (the  "Code")  and  regulations  promulgated
thereunder  less one dollar.  Said sum shall be paid, at the option of Employee,
either (i) in periodic payments over the next 36 months or the remaining term of
this  Agreement,  whichever is less,  as if Employee's  employment  had not been
terminated,  or  (ii)  in one (1)  lump  sum  within  thirty  (30)  days of such
termination,  and such  payments  shall be in lieu of any other future  payments
which the Employee  would be otherwise  entitled to receive  under  Section 9 of
this Agreement.  Further,  Employee shall be eligible to continue  participation
for the  Employee  and  Employee's  dependents  under  the  medical  and  dental
insurance program of the Bank, and any successors thereto, from the date of such
termination  of employment  through the period ending as of the first day of the

                                       5
<PAGE>

month following Employee's  attainment of age 65.  Notwithstanding the forgoing,
all sums payable hereunder shall be reduced in such manner and to such extent so
that no such payments made hereunder when  aggregated with all other payments to
be made to the  Employee  by the Bank or the  Parent  shall be deemed an "excess
parachute payment" in accordance with Section 280G of the Code and be subject to
the excise tax  provided  at Section  4999(a) of the Code.  The term  "Change in
Control" shall mean: (i) the sale of all, or a material  portion,  of the assets
of the Bank or Parent; (ii) the merger or recapitalization of the Parent whereby
the Parent is not the surviving entity; (iii) a change in control of the Bank or
Parent, as otherwise  defined or determined by the Office of Thrift  Supervision
or  regulations  promulgated  by  it;  or  (iv)  the  acquisition,  directly  or
indirectly,  of the beneficial  ownership (within the meaning of that term as it
is used in Section  13(d) of the  Securities  Exchange Act of 1934 and the rules
and regulations  promulgated thereunder) of twenty-five percent (25%) or more of
the outstanding voting securities of the Parent by any person,  trust, entity or
group. This limitation shall not apply to the purchase of shares by underwriters
in connection  with a public offering of Parent stock, or the purchase of shares
of up to 25% of any  class  of  securities  of  the  Parent  by a  tax-qualified
employee stock benefit plan which is exempt from the approval requirements,  set
forth under 12 C.F.R. ss.574.3(c)(1)(vi) as now in effect or as may hereafter be
amended.  The term "person"  means an individual  other than the Employee,  or a
corporation,  partnership,  trust, association,  joint venture, pool, syndicate,
sole proprietorship, unincorporated organization or any other form of entity not
specifically listed herein.

         (b)  Notwithstanding  any  other  provision  of this  Agreement  to the
contrary,  Employee may voluntarily  terminate her employment during the term of
this Agreement following a Change in Control of the Bank or Parent, and Employee
shall thereupon be entitled to receive the payment described in Section 12(a) of
this Agreement,  upon the occurrence,  or within one year thereafter,  of any of
the  following  events,  which  have not been  consented  to in  advance  by the
Employee in  writing:  (i) if  Employee  would be required to move her  personal
residence or perform her principal  executive  functions  more than  thirty-five
(35)  miles  from  the  Employee's  primary  office  as of the  signing  of this
Agreement;  (ii) if in the  organizational  structure  of the  Bank  or  Parent,
Employee would be required to report to a person or persons other than the Board
of the Bank or  Parent;  (iii) if the Bank or  Parent  should  fail to  maintain
Employee's  base  compensation in effect as of the date of the Change in Control
and the existing  employee  benefits plans,  including  material fringe benefit,
stock option and retirement plans; (iv) if Employee would be assigned duties and
responsibilities  other than those  normally  associated  with her  position  as
referenced  at  Section  1,  herein;  (v) if  Employee  would not be  elected or
reelected to the Board of Directors of the Bank or Parent; or (vi) if Employee's
responsibilities  or authority  have in any way been  materially  diminished  or
reduced.

                                       6
<PAGE>

         13.  Successors and Assigns.
              ----------------------

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

         (b) Since the Bank 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
Bank.

         14.  Amendments.  No amendments or additions to this Agreement shall be
              -----------
binding  upon the  parties  hereto  unless  made in  writing  and signed by both
parties, except as herein otherwise specifically provided.

         15.  Applicable  Law. This agreement  shall be governed by all respects
              ----------------
whether as to validity, construction, capacity, performance or otherwise, by the
laws of the State of  Maryland,  except to the extent that  Federal law shall be
deemed to apply. Notwithstanding anything herein to the contrary, all provisions
of the Agreement shall be subject to and conditioned upon compliance with 12 CFR
563.39(b).

         16.  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.

         17. Arbitration. Any controversy or claim arising out of or relating to
             ------------
this  Agreement,  or the breach  thereof,  shall be settled  by  arbitration  in
accordance  with the rules then in effect of the district office of the American
Arbitration  Association  ("AAA")  nearest to the home  office of the Bank,  and
judgment upon the award rendered may be entered in any court having jurisdiction
thereof,  except to the extend  that the parties  may  otherwise  reach a mutual
settlement of such issue. The Bank shall incur the cost of all fees and expenses
associated  with filing a request for  arbitration  with the AAA,  whether  such
filing  is  made on  behalf  of the  Bank or the  Employee,  and the  costs  and
administrative  fees  associated  with  employing  the  arbitrator  and  related
administrative  expenses assessed by the AAA. The Bank shall reimburse  Employee
for all reasonable  costs and expenses,  including  reasonable  attorneys' fees,
arising from such dispute, proceedings or actions, following the delivery of the
decision  of the  arbitrator.  Further,  the  settlement  of the  dispute  to be
approved by the Board of the Bank or the Parent may include a provision  for the
reimbursement by the Bank or Parent to the Employee for all reasonable costs and
expenses,  including  reasonable  attorneys'  fees,  arising from such  dispute,
proceedings  or  actions,  or the Board of the Bank or the Parent may  authorize
such reimbursement of such reasonable costs

                                       7

<PAGE>

and expenses by separate action upon a written action and  determination  of the
Board  following  settlement of the dispute.  Such  reimbursement  shall be paid
within  ten (10) days of  Employee  furnishing  to the Bank or Parent  evidence,
which may be in the form, among other things, of a canceled check or receipt, of
any costs or expenses incurred by Employee.

         18. Indemnification; Insurance
             --------------------------
                  (a) Indemnification. The Bank agrees to indemnify the Employee
                      ----------------
and his heirs,  executors,  and  administrators  to the fullest extent permitted
under applicable law and regulations,  including,  without  limitation 12 U.S.C.
Section  1828(k),  against  any  and all  expenses  and  liabilities  reasonably
incurred by the Employee in connection  with or arising out of any action,  suit
or proceeding in which the Employee may be involved by reason of his having been
a director or officer of the Bank or any of its subsidiaries, whether or not the
Employee is a director or officer at the time of incurring  any such expenses or
liabilities.  Such  expenses and  liabilities  shall  include,  but shall not be
limited  to,  judgments,  court  costs  and  attorney's  fees  and  the  cost of
reasonable  settlements.  The Employee shall be entitled to  indemnification  in
respect of a settlement  only if the Board of Directors of the Bank has approved
such  settlement.   Notwithstanding   anything  herein  to  the  contrary,   (i)
indemnification  for expenses shall not extend to matters for which the Employee
has been  terminated  for,  and (ii) the  obligations  of this  Section 18 shall
survive  the of this.  Nothing  contained  herein  shall be  deemed  to  provide
indemnification prohibited by applicable law or regulation.

                  (b)  Insurance.  During the of the  Agreement,  the Bank shall
                       ----------
provide  the  Employee  (and his  heirs,  executors,  and  administrators)  with
coverage  under a  directors'  and  officers'  liability  policy  at the  Bank's
expense,  at least equivalent to such coverage  otherwise  provided to the other
directors and senior officers of the Bank.

         19. 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.

                                       8

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