Document:

exv10w15

Exhibit 10.15

FORM OF

ATHENS BANCSHARES CORPORATION

EMPLOYMENT AGREEMENT

     THIS EMPLOYMENT AGREEMENT (the “Agreement”) is entered into as of [date], by and among ATHENS
BANCSHARES CORPORATION, a Tennessee corporation (the “Corporation”) and JEFFREY L. CUNNINGHAM (the
“Executive”).

     WHEREAS, the Executive serves in positions of substantial responsibility with the Corporation;
and

     WHEREAS, the Corporation wishes to set forth the terms of the Executive’s continued employment
in these positions; and

     WHEREAS, the Executive is willing and desires to serve in these positions with the
Corporation.

     NOW THEREFORE, in consideration of these premises, the mutual covenants contained herein, and
other good and valuable consideration the receipt and sufficiency of which are hereby acknowledged,
the parties hereto agree as follows.

ARTICLE 1

EMPLOYMENT

     1.1 Employment. The Corporation hereby employs the Executive to serve as President and
Chief Executive Officer of the Corporation according to the terms and conditions of this Agreement
and for the period stated in Section 1.3 of this Agreement. The Executive hereby accepts
employment according to the terms and conditions of this Agreement and for the period stated in
Section 1.3 of this Agreement.

     1.2 Responsibilities and Duties.

     (a) As President and Chief Executive Officer, the Executive shall serve under the board of
directors of the Corporation and will perform all duties and will have all powers associated with
these positions, as set forth in any job description provided to the Executive by the Corporation
or as may be set forth in the bylaws of the Corporation. In addition, the Executive shall be
responsible for establishing the business objectives, policies and strategic plans of the
Corporation. The Executive shall report directly to the board of directors of the Corporation.

     (b) During the period of his employment hereunder, except for reasonable periods of absence
occasioned by illness, reasonable vacation periods, and other reasonable leaves of absence approved
by the board of directors of the Corporation, the Executive will devote all of his business time,
attention, skill and efforts to the faithful performance of his duties under this Agreement,
including activities and duties directed by the board of directors. Notwithstanding the preceding
sentence, subject to the approval of the board of directors, the Executive may serve as a member of
the board of directors of business, community and charitable organizations, provided that in each
case the service shall not materially interfere with the performance of his duties under this
Agreement, adversely affect the reputation of the Corporation or any other affiliates of the
Corporation, or present any conflict of interest. Nothing in this Section 1.2 shall prevent the
Executive from managing personal investments and affairs, provided that

 

 

doing so also does not interfere with the proper performance of the Executive’s duties and
responsibilities under this Agreement.

     1.3 Term.

     (a) The term of this Agreement shall include: (i) the initial term, consisting of the period
commencing on the date of this Agreement (the “Effective Date”) and continuing for thirty-six (36)
full months thereafter, plus (ii) any and all extensions of the initial term made pursuant to this
Section 1.3.

     (b) Commencing as of the first anniversary of the Effective Date and continuing as of each
anniversary of the Effective Date thereafter, the disinterested members of the board of directors
of the Corporation may extend the Agreement term for an additional year, so that the remaining term
of the Agreement again becomes thirty-six (36) full months from the applicable anniversary of the
Effective Date, unless the Executive elects not to extend the term of this Agreement by giving
written notice at least thirty (30) days prior to the applicable anniversary date.

     (c) The disinterested members of the board of directors of the Corporation will review the
Agreement and the Executive’s performance annually for purposes of determining whether to extend
the Agreement term and will include the rationale and results of its review in the minutes of the
meetings. The board of directors of the Corporation will notify the Executive no earlier than
sixty (60) days and no later than thirty (30) days prior to the applicable anniversary date whether
it has determined to extend the Agreement.

     (d) Nothing in this Agreement shall mandate or prohibit a continuation of the Executive’s
employment following the expiration of the term of this Agreement, upon such terms and conditions
as the Corporation and the Executive may mutually agree.

     1.4 Service on the Boards of Directors. The Executive serves as a member of the board
of directors of the Corporation. The board of directors of the Corporation shall undertake every
lawful effort to ensure that the Executive continues throughout the term of his employment to be
elected or reelected as a director of the Corporation. Notwithstanding anything in this Agreement
to the contrary, unless otherwise agreed to by the parties, the Executive shall be deemed to have
resigned as a director of the Corporation effective immediately after termination of the
Executive’s employment under Article 3 of this Agreement, regardless of whether the Executive
submits a formal, written resignation as director.

ARTICLE 2

COMPENSATION AND BENEFITS

     2.1 Base Salary and Bonus and Incentive Compensation.

     (a) In consideration of the Executive’s performance of the obligations under this Agreement,
the Corporation shall pay or cause to be paid to the Executive a salary at the annual rate of not
less than $[amount], payable according to its regular payroll practices. During the period of this
Agreement, the Executive’s Base Salary shall be reviewed at least annually by the compensation
committee designated by the board of directors of the Corporation. Any increase in Base Salary
will become the “Base Salary” for purposes of this Agreement.

     (b) The Executive shall be entitled to incentive compensation in accordance with any program
established by the Corporation or as otherwise provided to the Executive at the discretion of the
Corporation.

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     2.2 Benefit Plans and Perquisites. For as long as the Executive is employed by the
Corporation, the Executive shall be eligible (x) to participate in any and all officer or employee
compensation, incentive compensation and benefit plans in effect from time to time, including
without limitation plans providing retirement, medical, dental, disability, and group life benefits
and including stock-based compensation, incentive, or bonus plans existing on the date of this
Agreement or adopted after the date of this Agreement, provided that the Executive satisfies the
eligibility requirements for any of the plans or benefits, and (y) to receive any and all other
fringe and other benefits provided from time to time, including the specific items described in
(a)-(d) below.

     (a) Reimbursement of business expenses. The Executive shall be entitled to
reimbursement for all reasonable business expenses incurred while performing his obligations under
this Agreement, including but not limited to all reasonable business travel and entertainment
expenses incurred while acting at the request of or in the service of the Corporation and
reasonable expenses for attendance at annual and other periodic meetings of trade associations (at
least two such events per year) and payment of dues for membership in the Tennessee Bar and
associated continuing legal education. Expenses will be reimbursed if they are submitted in
accordance with the Corporation’s policies and procedures.

     (b) Automobile. The Corporation shall provide the Executive with a vehicle allowance
as set forth in Appendix A. The Corporation shall increase the automobile allowance each year to
reflect any appropriate cost of living adjustments.

     (c) Facilities. The Corporation will furnish the Executive with the working
facilities and staff customary for executive officers with the comparable titles and duties of the
Executive as set forth in Sections 1.1 and 1.2 of this Agreement and as are necessary for the
Executive to perform his duties. The location of such facilities and staff shall be at the
principal administrative offices of the Corporation, or at such other site or sites customary for
such offices.

     (d) Club Membership. The Corporation shall provide the Executive with an allowance
sufficient to cover dues at the Springbrook Golf and Country Club.

     2.3 Vacation; Leave. The Executive shall be entitled to sick leave and paid annual
vacation (of at least four weeks of vacation) in accordance with policies established from time to
time by the Corporation. In addition to paid vacations and other leave, the board of directors may
grant the Executive 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 of the Corporation may determine.

     2.4 Insurance. The Corporation shall maintain or cause to be maintained director and
officer liability insurance covering the Executive throughout the term of this Agreement.

ARTICLE 3

EMPLOYMENT TERMINATION

     3.1 Termination of Employment.

     (a) Death. The Executive’s employment shall terminate automatically at the Executive’s
death. If the Executive dies in active service to the Corporation, the Executive’s estate shall
receive any sums that would have otherwise been due to the Executive as Base Salary and
reimbursement of expenses through the end of the then remaining term of the Agreement, payable in a
single lump sum no later than nine (9) months from the date of the Executive’s death.

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     (b) Disability. By delivery of written notice thirty (30) days in advance to the
Executive, the Corporation may terminate the Executive’s employment if the Executive is disabled.
For purposes of this Agreement the Executive shall be considered “disabled” if an independent
physician selected by the Corporation and reasonably acceptable to the Executive or the Executive’s
legal representative determines that, because of illness or accident, the Executive is unable to
perform the Executive’s duties and will be unable to perform the Executive’s duties for a period of
ninety (90) consecutive days. The Executive shall not be considered disabled, however, if the
Executive returns to work on a full-time basis within thirty (30) days after the Corporation gives
notice of termination due to disability. If the Executive is terminated by Athens Federal
Community Bank (the “Bank”) because of disability, the Executive’s employment with the Corporation
shall also terminate at the same time. During the period of incapacity leading up to the
termination of the Executive’s employment under this provision, and for the then remaining term of
the Agreement, the Corporation shall continue to pay the full Base Salary at the rate then in
effect and pay or provide the Executive with all perquisites and other compensation and benefits
contemplated by this Agreement or otherwise, provided that the amount of the payments by the
Corporation to the Executive under this Section 3.1(b) shall be reduced by the sum of the amounts,
if any, payable to the Executive for the same period under any disability benefit plan covering the
Executive.

     3.2 Involuntary Termination with Cause. The Corporation may terminate the Executive’s
employment for Cause. If the Executive’s employment terminates for Cause, the Executive shall
receive the Base Salary through the date on which the termination of employment becomes effective
and reimbursement of expenses to which the Executive is entitled when termination becomes
effective. Notwithstanding anything to the contrary in this Agreement, if the Executive is
terminated for Cause by the Bank, the Executive shall be deemed also to have been terminated for
Cause by the Corporation. The Executive shall not be deemed to have been terminated for Cause
under this Agreement unless and until there is delivered to the Executive a copy of a resolution
adopted at a meeting of the board of directors called and held for the purpose, which resolution
shall (x) contain findings that the Executive has committed an act constituting Cause, and (y)
specify the particulars thereof. The resolution of the board of directors shall be deemed to have
been duly adopted if and only if it is adopted by the affirmative vote of a majority of the
directors of the Corporation then in office, excluding the Executive. Notice of the meeting and
the proposed termination for Cause shall be given to the Executive a reasonable time before the
meeting of the board of directors. The Executive and the Executive’s counsel (if the Executive
chooses to have counsel present) shall have a reasonable opportunity to be heard by the board of
directors at the meeting. For purposes of this Agreement “Cause” means any of the following:

               (1) a material act of dishonesty in performing Executive’s duties on behalf of the
Corporation;

               (2) a willful misconduct that in the judgment of the board of directors will likely cause
economic damage to the Corporation or its affiliates or injury to the business reputation of the
Corporation or its affiliates ;

               (3) incompetence (in determining incompetence, the acts or omissions shall be measured against
standards generally prevailing in the savings institutions industry);

               (4) a breach of fiduciary duty involving personal profit;

               (5) the intentional failure to perform stated duties under this Agreement after written notice
thereof from the board of directors of the Corporation;

               (6) a willful violation of any law, rule or regulation (other than minor or routine traffic
violations or similar offenses) that reflects adversely on the reputation of the Corporation or

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its affiliates, any felony conviction, any violation of law involving moral turpitude, or any
violation of a final cease-and-desist order; or

               (7) a material breach by the Executive of any provision of this Agreement.

No act, or failure to act, on the Executive’s part shall be considered “willful” unless he has
acted, or failed to act, with an absence of good faith and without reasonable belief that his
action or failure to act was in the best interest of the Corporation.

     3.3 Voluntary Termination by the Executive Without Good Reason. In addition to his
other rights to terminate his employment under this Agreement, the Executive may voluntarily
terminate employment during the term of this Agreement upon at least ninety (90) days prior written
notice to the board of directors of the Corporation. Upon the Executive’s voluntary termination, he
will receive only his compensation and vested rights and benefits to the date of his termination of
employment. Following his voluntary termination of employment under this Section 3.3, the Executive
will be subject to the restrictions set forth in Article 7.

     3.4 Involuntary Termination Without Cause and Voluntary Termination with Good Reason.
With written notice to the Executive at least thirty (30) days in advance, the Corporation may
terminate the Executive’s employment without Cause. Termination shall take effect at the end of
the notice period. With advance written notice to the Corporation as provided in clause (y), the
Executive may terminate employment for Good Reason. If the Executive’s employment terminates
involuntarily without Cause or voluntarily but with Good Reason, the Executive shall be entitled to
the benefits specified in Article 4 of this Agreement. For purposes of this Agreement, a voluntary
termination by the Executive shall be considered a voluntary termination with Good Reason if the
conditions stated in both clauses (x) and (y) of this Section 3.4 are satisfied:

     (x) a voluntary termination by the Executive shall be considered a voluntary termination with
Good Reason if any of the following occur without the Executive’s written consent, and the term
Good Reason shall mean the occurrence of any of the following without the Executive’s written
consent:

               (1) a failure to reelect or reappoint the Executive as President and Chief Executive Officer
of the Corporation (provided, however, that a change in the Executive’s position consented to in
writing by the Executive in connection with succession planning of the Corporation, shall not be
deemed a Good Reason);

               (2) a material change in the Executive’s position to become one of lesser responsibility,
importance, or scope from the position and attributes thereof described in Sections 1.1 and 1.2 of
this Agreement (provided, however, that a reduction in duties and responsibilities consented to in
writing by the Executive in connection with succession planning of the Corporation, shall not be
deemed a Good Reason);

               (3) a liquidation or dissolution of the Corporation or the Bank, other than liquidations or
dissolutions that are caused by reorganizations that do not affect the status of the Executive;

               (4) a material reduction in Executive’s Base Salary or benefits required to be provided
hereunder (other than a reduction that is generally applicable to the Corporation’s executive
employees or a reduction or elimination of the Executive’s benefits under one or more benefit plans
maintained by the Corporation as part of a good faith, overall reduction or elimination of such
plans or

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benefits applicable to all participants in a manner that does not discriminate against the
Executive (except as such discrimination may be necessary to comply with applicable law));

               (5) a relocation of the Executive’s principal place of employment by more than twenty-five
(25) miles from its location as of the date of this Agreement; or

               (6) a material breach of this Agreement by the Corporation.

     (y) the Executive must give notice to the Corporation of the existence of one or more of the
conditions described in clause (x) within sixty (60) days after the initial existence of the
condition, and the Corporation shall have thirty (30) days thereafter to remedy the condition. In
addition, the Executive’s voluntary termination because of the existence of one or more of the
conditions described in clause (x) must occur within six (6) months after the initial existence of
the condition.

ARTICLE 4

SEVERANCE COMPENSATION

     4.1 Cash Severance after Termination Without Cause or Termination for Good Reason.

     (a) Subject to the possibility that cash severance after employment termination might be
delayed under Section 4.1(b), if the Executive’s employment terminates involuntarily but without
Cause or if the Executive voluntarily terminates employment with Good Reason, the Executive shall
for the unexpired term of this Agreement, plus an additional twelve (12) months, and in accordance
with the Corporation’s regular pay practices, continue to receive the Base Salary in effect at the
Executive’s termination of employment. However, the Corporation and the Executive acknowledge and
agree that the severance benefits under this Section 4.1 shall not be payable if severance benefits
are payable or shall have been paid to the Executive under Article 5 of this Agreement.

     (b) If when employment termination occurs the Executive is a “specified employee” within the
meaning of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), if the cash
severance payment under Section 4.1(a) would be considered deferred compensation under Section 409A
of the Code, and finally if an exemption from the six-month delay requirement of Section
409A(a)(2)(B)(i) of the Code is not available, the Executive’s continued Base Salary under Section
4.1(a) for the first six months after employment termination shall be paid to the Executive in a
single lump sum without interest on the first day of the seventh (7th) month after the
month in which the Executive’s employment terminates and all remaining payments shall be made as
originally scheduled. References in this Agreement to Section 409A of the Code include rules,
regulations, and guidance of general application issued by the Department of the Treasury under
Section 409A of the Code.

     4.2 Post-Termination Insurance Coverage.

     (a) If the Executive’s employment terminates involuntarily but without Cause or voluntarily
but with Good Reason, or because of disability, the Corporation shall continue or cause to be
continued at the Corporation’s expense medical and life insurance benefits for the Executive and
any of his dependents covered at the time of his termination. The medical insurance benefits shall
continue until the first to occur of (w) the Executive’s return to employment with the Corporation
or another employer, (x) the Executive’s attainment of age 65, (y) the Executive’s death, or (z)
the end of the term remaining under this Agreement when the Executive’s employment terminates.
Notwithstanding the foregoing, if the Executive’s employment terminates for any reason, other than
for Cause, after the Executive has attained age 55, the Corporation shall provide the Executive and
his dependents with medical insurance coverage that is not less favorable than the Corporation
provides for other executive officers, at no cost to the

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Executive, until the Executive first becomes eligible for Medicare. This last sentence shall
survive the expiration of this Agreement.

     (b) If (x) under the terms of the applicable policy or policies for the insurance benefits
specified in Section 4.2(a) it is not possible to continue coverage for the Executive and his
dependents, or (y) when employment termination occurs the Executive is a “specified employee”
within the meaning of Section 409A of the Code, if any of the continued insurance coverage benefits
specified in Section 4.2(a) would be considered deferred compensation under Section 409A of the
Code, and finally, if an exemption from the six-month delay requirement of Section 409A(a)(2)(B)(i)
of the Code is not available for that particular insurance benefit, the Corporation shall pay to
the Executive in a single lump sum an amount in cash equal to the present value of the
Corporation’s projected cost to maintain that particular insurance benefit (and associated income
tax gross-up benefit, if applicable) had the Executive’s employment not terminated, assuming
continued coverage for 36 months. The lump-sum payment shall be made thirty (30) days after
employment termination or, if Section 4.1(b) applies, on the first day of the seventh
(7th) month after the month in which the Executive’s employment terminates.

ARTICLE 5

CHANGE IN CONTROL BENEFITS

     5.1 Change in Control Benefits. If a Change in Control occurs during the term of this
Agreement and, thereafter, the Executive’s employment terminates involuntarily but without Cause or
if the Executive voluntarily terminates employment with Good Reason, the Corporation shall make or
cause to be made a lump-sum payment to the Executive in an amount in cash equal to three (3) times
the Executive’s average annual compensation. For this purpose, average annual compensation means
the Executive’s taxable income reported by the Corporation (or any affiliate of the Corporation)
for the five (5) calendar years immediately preceding the calendar year in which the Change in
Control occurs. The payment required under this paragraph is payable no later than five (5)
business days after the Executive’s termination of employment. If the Executive receives payment
under Section 5.1, the Executive shall not be entitled to any additional severance benefits under
Section 4.1 of this Agreement. In addition to the cash severance benefit provided for under this
Section 5.1, the Corporation shall provide the Executive with the post-termination insurance
coverage described in Section 4.2(a) of this Agreement, subject to the provisions of Section 4.2(b)
of this Agreement.

     5.2 Change in Control Defined. For purposes of this Agreement “Change in Control”
means a change in control as defined in Section 409A of the Code and rules, regulations, and
guidance of general application thereunder issued by the Department of the Treasury, including:

     (a) Change in ownership: a change in ownership of the Corporation occurs on the date
any one person or group accumulates ownership of Corporation stock constituting more than 50% of
the total fair market value or total voting power of Corporation stock;

     (b) Change in effective control: (x) any one person or more than one person acting as
a group acquires within a 12-month period ownership of Corporation stock possessing 30% or more of
the total voting power of Corporation stock, or (y) a majority of the Corporation’s board of
directors is replaced during any 12-month period by directors whose appointment or election is not
endorsed in advance by a majority of the Corporation’s board of directors; or

     (c) Change in ownership of a substantial portion of assets: a change in ownership of a
substantial portion of the Corporation’s assets occurs if in a 12-month period any one person or
more than one person acting as a group acquires from the Corporation assets having a total gross
fair market value equal to or exceeding 40% of the total gross fair market value of all of the
Corporation’s assets

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immediately before the acquisition or acquisitions. For this purpose, gross fair market value
means the value of the Corporation’s assets, or the value of the assets being disposed of,
determined without regard to any liabilities associated with the assets.

     5.3 Potential Limitation of Benefits Under Certain Circumstances. Notwithstanding any
other provisions of this Agreement, in the event that (x) the aggregate payments or benefits to be
made or afforded to the Executive under this Agreement or otherwise, which are deemed to be
parachute payments as defined in Section 280G of the Code or any successor thereof (the
“Termination Benefits”) would be deemed to include an “excess parachute payment” under Section 280G
of the Code; and (y) if such Termination Benefits were reduced to an amount (the “Non-Triggering
Amount”), the value of which is one dollar ($1.00) less than an amount equal to three (3) times the
Executive’s “base amount,” as determined in accordance with Section 280G of the Code and the
Non-Triggering Amount less the product of the marginal rate of any applicable state and federal
income tax and the Non-Triggering Amount would be greater than the aggregate value of the
Termination Benefits (without such reduction) minus (1) the amount of tax required to be paid by
the Executive thereon by Section 4999 of the Code and further minus (2) the product of the
Termination Benefits and the marginal rate of any applicable state and federal income tax, then the
Termination Benefits shall be reduced to the Non-Triggering Amount. The allocation of the
reduction required hereby among the Termination Benefits shall be determined by the Executive. The
Corporation’s independent public accountants will determine the value of any reduction in the
payments and benefits; the Corporation will pay for the accountants’ opinion. The Corporation may
request, and the Executive has the right to demand that, a ruling from the IRS as to whether any
disputed payments and benefits have adverse tax consequences. The Corporation will promptly
prepare and file the request for a ruling from the IRS, but in no event will the Corporation make
this filing later than thirty (30) days from the date of the accountant’s opinion referred to
above. The request will be subject to the Executive’s approval prior to filing; the Executive
shall not unreasonably withhold his approval. The Corporation and the Executive agree to be bound
by any ruling received from the IRS and to make appropriate payments to each other to reflect any
IRS rulings, together with interest at the applicable federal rate provided for in Section
7872(f)(2) of the Code. Nothing contained in this Agreement shall result in a reduction of any
payments or benefits to which the Executive may be entitled upon termination of employment other
than pursuant to Sections 4 and 5 hereof, or a reduction in the payments and benefits specified,
below zero.

ARTICLE 6

CONFIDENTIALITY AND CREATIVE WORK

     6.1 Non-disclosure. The Executive covenants and agrees not to reveal to any person,
firm, or corporation any confidential information of any nature concerning the Corporation or its
business, or anything connected therewith. As used in this Article 6 the term “confidential
information” means all of the Corporation’s and the Corporation’s affiliates’ confidential and
proprietary information and trade secrets in existence on the date hereof or existing at any time
during the term of this Agreement, including but not limited to:

     (a) the whole or any portion or phase of any business plans, financial information, purchasing
data, supplier data, accounting data, or other financial information;

     (b) the whole or any portion or phase of any research and development information, design
procedures, algorithms or processes, or other technical information;

     (c) the whole or any portion or phase of any marketing or sales information, sales records,
customer lists, prices, sales projections, or other sales information; and

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     (d) trade secrets, as defined from time to time by the laws of Tennessee.

     This Section 6.1 does not prohibit disclosure required by an order of a court having
jurisdiction or a subpoena from an appropriate governmental agency or disclosure made by the
Executive in the ordinary course of business and within the scope of the Executive’s authority.

     6.2 Return of Materials. The Executive agrees to immediately deliver or return to the
Corporation upon termination, upon expiration of this Agreement, or as soon thereafter as possible,
all written information and any other similar items furnished by the Corporation or prepared by the
Executive in connection with the Executive’s services hereunder and to immediately delete all
electronically stored data of the Corporation maintained on the Executive’s personal computers and
to return all Corporation-provided computers or communication devices (i.e., laptop, Blackberry,
PDA, etc.). The Executive will retain no copies thereof after termination of this Agreement or
termination of the Executive’s employment.

     6.3 Creative Work. The Executive agrees that all creative work and work product,
including but not limited to all technology, business management tools, processes, software,
patents, trademarks, and copyrights developed by the Executive during the term of this Agreement,
regardless of when or where such work or work product was produced, constitutes work made for hire,
all rights of which are owned by the Corporation. The Executive hereby assigns to the Corporation
all rights, title, and interest, whether by way of copyrights, trade secret, trademark, patent, or
otherwise, in all such work or work product, regardless of whether the same is subject to
protection by patent, trademark, or copyright laws.

     6.4 Affiliates’ Confidential Information is Covered; Confidentiality Obligation Survives
Termination. For purposes of this Agreement, the term “affiliate” of the Corporation includes
any entity that directly, or indirectly through one or more intermediaries, controls, is controlled
by, or is under common control of the Corporation. The rights and obligations set forth in this
Article 6 shall survive termination of this Agreement.

     6.5 Injunctive Relief. The Executive acknowledges that it is impossible to measure in
money the damages that will accrue to the Corporation if the Executive fails to observe the
obligations imposed by this Article 6. Accordingly, if the Corporation institutes an action to
enforce the provisions hereof, the Executive hereby waives the claim or defense that an adequate
remedy at law is available to the Corporation, and the Executive agrees not to urge in any such
action the claim or defense that an adequate remedy at law exists. The confidentiality and
remedies provisions of this Article 6 shall be in addition to and shall not be deemed to supersede
or restrict, limit, or impair the Corporation’s rights under applicable state or federal statute or
regulation dealing with or providing a remedy for the wrongful disclosure, misuse, or
misappropriation of trade secrets or proprietary or confidential information.

ARTICLE 7

COMPETITION AFTER EMPLOYMENT TERMINATION

     7.1 Covenant Not to Solicit Employees. The Executive agrees not to, directly or
indirectly, solicit or employ the services of any officer or employee of the Corporation (including
an individual who was an officer or employee of the Corporation during the one year period
following the Executive’s termination) for two years after the Executive’s employment termination.

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     7.2 Covenant Not to Compete.

     (a) The Executive covenants and agrees not to compete directly or indirectly with the
Corporation for one year after employment termination. For purposes of this Section 7.2:

	 	(1)	 	the term compete means:

	 	(i)	 	providing financial products or services on
behalf of any financial institution for any person residing in the
territory,
	 
	 	(ii)	 	assisting (other than through the performance
of ministerial or clerical duties) any financial institution in
providing financial products or services to any person residing in the
territory, or
	 
	 	(iii)	 	inducing or attempting to induce any person
who was a customer of the Corporation at the date of the Executive’s
employment termination to seek financial products or services from
another financial institution.

	 	(2)	 	the words directly or indirectly mean:

	 	(i)	 	acting as a consultant, officer, director,
independent contractor, or employee of any financial institution in
competition with the Corporation in the territory, or
	 
	 	(ii)	 	communicating to such financial institution the
names or addresses or any financial information concerning any person
who was a customer of the Corporation when the Executive’s employment
terminated.

	 	(3)	 	the term customer means any person to whom the Corporation is
providing financial products or services on the date of the Executive’s
employment termination or within one year thereafter.
	 
	 	(4)	 	the term financial institution means any bank, savings
association, or bank or savings association holding company, or any other
institution, the business of which is engaging in activities that are financial
in nature or incidental to such financial activities as described in Section
4(k) of the Bank Holding Company Act of 1956, other than the Corporation or any
of its affiliated corporations.
	 
	 	(5)	 	financial product or service means any product or service that
a financial institution or a financial holding company could offer by engaging
in any activity that is financial in nature or incidental to such a financial
activity under Section 4(k) of the Bank Holding Company Act of 1956 and that is
offered by the Corporation or an affiliate on the date of the Executive’s
employment termination, including but not limited to banking activities and
activities that are closely related and a proper incident to banking.
	 
	 	(6)	 	the term person means any individual or individuals,
corporation, partnership, fiduciary or association.

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	 	(7)	 	the term territory means the area within a 30-mile radius of
any office of the Corporation at the date of the Executive’s employment
termination.

     (b) If any provision of this Article 7 or any word, phrase, clause, sentence or other portion
thereof (including, without limitation, the geographical and temporal restrictions contained
therein) is held to be unenforceable or invalid for any reason, the unenforceable or invalid
provision or portion shall be modified or deleted so that the provisions hereof, as modified, are
legal and enforceable to the fullest extent permitted under applicable law.

     (c) The Executive acknowledges that the Corporation’s willingness to enter into this Agreement
and to make the payments contemplated by Articles 3 and 4 of this Agreement is conditioned on the
Executive’s acceptance of the covenants set forth in Articles 6 and 7 of this Agreement and that
the Corporation would not have entered into this Agreement without such covenants in force.

     7.3 Injunctive and Other Relief. Because of the unique character of the services to be
rendered by the Executive hereunder, the Executive understands that the Corporation would not have
an adequate remedy at law for the material breach or threatened breach by the Executive of any one
or more of the Executive’s covenants in this Article 7. Accordingly, the Executive agrees that the
Corporation’s remedies for a breach of this Article 7 include, but are not limited to, (x)
forfeiture of any money representing accrued salary, contingent payments, or other fringe benefits
(including any amount payable pursuant to Article 4) due and payable to the Executive during the
period of any breach by the Executive, and (y) a suit in equity by the Corporation to enjoin the
Executive from the breach or threatened breach of such covenants. The Executive hereby waives the
claim or defense that an adequate remedy at law is available to the Corporation and the Executive
agrees not to urge in any such action the claim or defense that an adequate remedy at law exists.
Nothing herein shall be construed to prohibit the Corporation from pursuing any other or additional
remedies for the breach or threatened breach.

     7.4 Article 7 Survives Termination But Is Void After a Change in Control. The rights
and obligations set forth in this Article 7 shall survive termination of this Agreement. However,
Article 7 shall become null and void effective immediately upon a Change in Control.

ARTICLE 8

MISCELLANEOUS

     8.1 Successors and Assigns.

     (a) This Agreement shall be binding upon the Corporation and any successor to the Corporation,
including any persons acquiring directly or indirectly all or substantially all of the business or
assets of the Corporation by purchase, merger, consolidation, reorganization, or otherwise, but
this Agreement and the Corporation’s obligations under this Agreement are not otherwise assignable,
transferable, or delegable by the Corporation. By agreement in form and substance satisfactory to
the Executive, the Corporation shall require any successor to all or substantially all of the
business or assets of the Corporation expressly to assume and agree to perform this Agreement in
the same manner and to the same extent the Corporation would be required to perform had no
succession occurred.

     (b) This Agreement shall inure to the benefit of and be enforceable by the Executive’s
personal or legal representatives, executors, administrators, successors, heirs, distributees, and
legatees.

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     (c) Without written consent of the other parties, no party shall assign, transfer, or delegate
this Agreement or any rights or obligations under this Agreement, except as expressly provided
herein. Without limiting the generality or effect of the foregoing, the Executive’s right to
receive payments hereunder is not assignable or transferable, whether by pledge, creation of a
security interest, or otherwise, except for a transfer by the Executive’s will or by the laws of
descent and distribution. If the Executive attempts an assignment or transfer that is contrary to
this Section 8.1, the Corporation shall have no liability to pay any amount to the assignee or
transferee.

     8.2 Governing Law, Jurisdiction and Forum. This Agreement shall be construed under and
governed by the internal laws of the State of Tennessee, without giving effect to any conflict of
laws provision or rule that would cause the application of the laws of any jurisdiction other than
Tennessee. By entering into this Agreement, the Executive acknowledges that the Executive is
subject to the jurisdiction of both the federal and state courts in Tennessee.

     8.3 Entire Agreement. This Agreement sets forth the entire agreement of the parties
concerning the employment of the Executive by the Corporation. Any oral or written statements,
representations, agreements, or understandings made or entered into prior to or contemporaneously
with the execution of this Agreement are hereby rescinded, revoked, and rendered null and void by
the parties.

     8.4 Notices. All notices, requests, demands, and other communications hereunder shall
be in writing and shall be deemed to have been duly given if delivered by hand or mailed, certified
or registered mail, return receipt requested, with postage prepaid. Unless otherwise changed by
notice, notice shall be properly addressed to the Executive if addressed to the address of the
Executive on the books and records of the Corporation at the time of the delivery of such notice,
and properly addressed to the Corporation if addressed to the boards of directors of the
Corporation at the Corporation’s executive offices.

     8.5 Severability. If there is a conflict between any provision of this Agreement and
any statute, regulation, or judicial precedent, the latter shall prevail, but the affected
provisions of this Agreement shall be curtailed and limited solely to the extent necessary to bring
them within the requirements of law. If any provisions of this Agreement is held by a court of
competent jurisdiction to be indefinite, invalid, void or voidable, or otherwise unenforceable, the
remainder of this Agreement shall continue in full force and effect unless that would clearly be
contrary to the intentions of the parties or would result in an injustice.

     8.6 Captions and Counterparts. The captions in this Agreement are solely for
convenience. The captions do not define, limit, or describe the scope or intent of this Agreement.
This Agreement may be executed in several counterparts, each of which shall be deemed to be an
original but all of which together shall constitute one and the same instrument.

     8.7 No Duty to Mitigate. The Executive shall not be required to mitigate the amount
of any payment provided for in this Agreement by seeking other employment. Moreover, provided the
Executive is not in breach of any obligation under Articles 6 and 7 of this Agreement, the amount
of any payment provided for in this Agreement shall not be reduced by any compensation earned or
benefits provided as the result of employment of the Executive or as a result of the Executive
being self-employed after employment termination.

     8.8 Amendment and Waiver. This Agreement may not be amended, released, discharged,
abandoned, changed, or modified in any manner, except by an instrument in writing signed by each of
the parties hereto. The failure of any party hereto to enforce at any time any of the provisions
of this Agreement shall not be construed to be a waiver of any such provision, nor affect the
validity of this Agreement or any part thereof or the right of any party thereafter to enforce each
and every such

12

 

provision. No waiver or any breach of this Agreement shall be held to be a waiver of any
other or subsequent breach.

     8.9 Compliance with Internal Revenue Code Section 409A. The Corporation and the
Executive intend that their exercise of authority or discretion under this Agreement shall comply
with Section 409A of the Code. If any provision of this Agreement does not satisfy the
requirements of Section 409A of the Code, the provision shall nevertheless be applied in a manner
consistent with those requirements. If any provision of this Agreement would subject the Executive
to additional tax or interest under Section 409A of the Code, the Corporation shall reform the
provision. However, the Corporation shall maintain to the maximum extent practicable the original
intent of the applicable provision without subjecting the Executive to additional tax or interest,
and the Corporation shall not be required to incur any additional compensation expense as a result
of the reformed provision.

     8.10 Source of Payments. Notwithstanding any provision in this Agreement to the
contrary, to the extent payments and benefits, as provided for under this Agreement, are paid or
received by the Executive under an employment agreement in effect between the Executive and the
Bank, the payments and benefits paid by the Bank will be subtracted from any amount or benefit due
simultaneously to the Executive under similar provisions of this Agreement. Payments will be
allocated in proportion to the level of activity and the time expended by the Executive on
activities related to the Corporation and the Bank, respectively, as determined by the Corporation
and the Bank.

[Signature Page to Follow]

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

	 	 	 	 	 
	 	ATHENS BANCSHARES CORPORATION

 	 
	 	
[Name]

For the Board of Directors

 	 
	 	 	 
	 
	 	
Jeffrey L. Cunningham

 	 
	 

14

 

	 	 	 	 	 

Appendix A

Automobile Allowanceexv10w16

Exhibit 10.16

FORM OF

ATHENS BANCSHARES CORPORATION

EMPLOYMENT AGREEMENT

     THIS EMPLOYMENT AGREEMENT (the “Agreement”) is entered into as [date], by and among ATHENS
BANCSHARES CORPORATION, a Tennessee corporation (the “Corporation”), and [NAME] (the “Executive”).

     WHEREAS, the Executive serves in a position of substantial responsibility with the
Corporation; and

     WHEREAS, the Corporation wishes to set forth the terms of the Executive’s continued employment
in these positions; and

     WHEREAS, the Executive is willing and desires to serve in this position with the Corporation.

     NOW THEREFORE, in consideration of these premises, the mutual covenants contained herein, and
other good and valuable consideration the receipt and sufficiency of which are hereby acknowledged,
the parties hereto agree as follows.

ARTICLE 1

EMPLOYMENT

     1.1 Employment. The Corporation hereby employs the Executive to serve as [title]
according to the terms and conditions of this Agreement and for the period stated in Section 1.3 of
this Agreement. The Executive hereby accepts employment according to the terms and conditions of
this Agreement and for the period stated in Section 1.3 of this Agreement.

     1.2 Responsibilities and Duties.

     (a) As [title], the Executive shall report to the Chief Executive Officer and will perform all
duties and will have all powers associated with this position, as set forth in any job description
provided to the Executive by the Corporation or as may be set forth in the bylaws of the
Corporation.

     (b) During the period of his employment hereunder, except for reasonable periods of absence
occasioned by illness, reasonable vacation periods, and other reasonable leaves of absence approved
by the board of directors of the Corporation, the Executive will devote all of his business time,
attention, skill and efforts to the faithful performance of his duties under this Agreement,
including activities and duties directed by the Chief Executive Officer and the board of directors
of the Corporation. Notwithstanding the preceding sentence, subject to the approval of the board of
directors of the Corporation, the Executive may serve as a member of the board of directors of
business, community and charitable organizations, provided that in each case the service shall not
materially interfere with the performance of his duties under this Agreement, adversely affect the
reputation of the Corporation or any other affiliates of the Corporation, or present any conflict
of interest. Nothing in this Section 1.2 shall prevent the Executive from managing personal
investments and affairs, provided that doing so also does not interfere with the proper performance
of the Executive’s duties and responsibilities under this Agreement.

 

 

     1.3 Term.

     (a) The term of this Agreement shall include: (i) the initial term, consisting of the period
commencing on the date of this Agreement (the “Effective Date”) and continuing for thirty-six (36)
full months thereafter, plus (ii) any and all extensions of the initial term made pursuant to this
Section 1.3.

     (b) Commencing as of the first anniversary of the Effective Date and continuing as of each
anniversary of the Effective Date thereafter, the disinterested members of the board of directors
of the Corporation may extend the Agreement term for an additional year, so that the remaining term
of the Agreement again becomes thirty-six (36) full months from the applicable anniversary of the
Effective Date, unless the Executive elects not to extend the term of this Agreement by giving
written notice at least thirty (30) days prior to the applicable anniversary date.

     (c) The disinterested members of the board of directors of the Corporation will review the
Agreement and the Executive’s performance annually for purposes of determining whether to extend
the Agreement term and will include the rationale and results of its review in the minutes of the
meetings. The board of directors will notify the Executive no earlier than sixty (60) days and nor
later than thirty (30) days prior to the applicable anniversary date whether it has determined to
extend the Agreement.

     (d) Nothing in this Agreement shall mandate or prohibit a continuation of the Executive’s
employment following the expiration of the term of this Agreement, upon such terms and conditions
as the Corporation and the Executive may mutually agree.

ARTICLE 2

COMPENSATION AND BENEFITS

     2.1 Base Salary and Bonus.

     (a) In consideration of the Executive’s performance of the obligations under this Agreement,
the Corporation shall pay or cause to be paid to the Executive a salary at the annual rate of not
less than $[amount], payable according to the regular payroll practices of the Corporation. During
the period of this Agreement, the Executive’s Base Salary shall be reviewed at least annually by
the compensation committee designated by the board of directors of the Corporation. Any increase
in Base Salary will become the “Base Salary” for purposes of this Agreement.

     (b) The Executive shall be eligible for a discretionary annual bonus, as determined by the
Board of Directors of the Corporation.

     2.2 Benefit Plans and Perquisites. For as long as the Executive is employed by the
Corporation, the Executive shall be eligible (x) to participate in any and all officer or employee
compensation, incentive compensation and benefit plans in effect from time to time, including
without limitation plans providing retirement, medical, dental, disability, and group life benefits
and including stock-based compensation, incentive, or bonus plans existing on the date of this
Agreement or adopted after the date of this Agreement, provided that the Executive satisfies the
eligibility requirements for any the plans or benefits, and (y) to receive any and all other fringe
and other benefits provided from time to time, including the specific items described in (a)-(c)
below.

     (a) Reimbursement of business expenses. The Executive shall be entitled to
reimbursement for all reasonable business expenses incurred while performing his obligations under
this Agreement, including but not limited to all reasonable business travel and entertainment
expenses incurred while

2

 

acting at the request of or in the service of the Corporation. Expenses will be reimbursed if
they are submitted in accordance with the Corporation’s policies and procedures.

     (b) Automobile. The Corporation shall provide the Executive with a vehicle allowance
as set forth in Appendix A. The Corporation shall increase the automobile allowance each year to
reflect any appropriate cost of living adjustments.

     (c) Facilities. The Corporation will furnish the Executive with the working
facilities and staff customary for executive officers with the comparable titles and duties of the
Executive as set forth in Sections 1.1 and 1.2 of this Agreement and as are necessary for the
Executive to perform his duties. The location of such facilities and staff shall be at the
principal administrative offices of the Corporation, or at such other site or sites customary for
such offices.

     2.3 Vacation; Leave. The Executive shall be entitled to sick leave and paid annual
vacation (of at least four weeks of vacation) in accordance with policies established from time to
time by the Corporation. In addition to paid vacations and other leave, the board of directors of
the Corporation may grant the Executive 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 may determine.

     2.4 Insurance. The Corporation shall maintain or cause to be maintained, director and
officer liability insurance covering the Executive throughout the term of this Agreement.

ARTICLE 3

EMPLOYMENT TERMINATION

     3.1 Termination of Employment.

     (a) Death. The Executive’s employment shall terminate automatically at the Executive’s
death. If the Executive dies in active service to the Corporation, the Executive’s estate shall
receive any sums that would have otherwise been due to the Executive as Base Salary and
reimbursement of expenses through the end of the then remaining term of the Agreement, payable in a
single lump sum no later than nine (9) months from the date of the Executive’s death.

     (b) Disability. By delivery of written notice thirty (30) days in advance to the
Executive, the Corporation may terminate the Executive’s employment if the Executive is disabled.
For purposes of this Agreement the Executive shall be considered “disabled” if an independent
physician selected by the Corporation and reasonably acceptable to the Executive or the Executive’s
legal representative determines that, because of illness or accident, the Executive is unable to
perform the Executive’s duties and will be unable to perform the Executive’s duties for a period of
ninety (90) consecutive days. The Executive shall not be considered disabled, however, if the
Executive returns to work on a full-time basis within thirty (30) days after the Corporation gives
notice of termination due to disability. If the Executive is terminated by the Athens Federal
Community Bank (the “Bank”) because of disability, the Executive’s employment with the Corporation
shall also terminate at the same time. During the period of incapacity leading up to the
termination of the Executive’s employment under this provision, the Corporation shall continue to
pay the full Base Salary at the rate then in effect and pay or provide all perquisites and other
benefits (other than bonus), provided that the amount of the payments by the Corporation to the
Executive under this Section 3.1(b) shall be reduced by the sum of the amounts, if any, payable to
the Executive for the same period under any disability benefit plan covering the Executive.

3

 

     3.2 Involuntary Termination with Cause. The Corporation may terminate the Executive’s
employment for Cause. If the Executive’s employment terminates for Cause, the Executive shall
receive the Base Salary through the date on which the termination of employment becomes effective
and reimbursement of expenses to which the Executive is entitled when termination becomes
effective. If the Executive is terminated for Cause by the Bank, the Executive shall be deemed
also to have been terminated for Cause by the Corporation. The Executive shall not be deemed to
have been terminated for Cause under this Agreement unless and until there is delivered to the
Executive a copy of a resolution adopted at a meeting of the board of directors of the Corporation
called and held for the purpose, which resolution shall (x) contain findings that the Executive has
committed an act constituting Cause, and (y) specify the particulars thereof. The resolution of
the board of directors shall be deemed to have been duly adopted if and only if it is adopted by
the affirmative vote of a majority of the directors of the Corporation then in office excluding the
Executive. Notice of the meeting and the proposed termination for Cause shall be given to the
Executive a reasonable time before the meeting of the board of directors. The Executive and the
Executive’s counsel (if the Executive chooses to have counsel present) shall have a reasonable
opportunity to be heard by the board of directors at the meeting. For purposes of this Agreement
“Cause” means any of the following:

          (1) a material act of dishonesty in performing Executive’s duties on behalf of the
Corporation;

          (2) a willful misconduct that in the judgment of the board of directors will likely cause
economic damage to the Corporation or its affiliates or injury to the business reputation of the
Corporation or its affiliates;

          (3) incompetence (in determining incompetence, the acts or omissions shall be measured against
standards generally prevailing in the savings institutions industry);

          (4) a breach of fiduciary duty involving personal profit;

          (5) the intentional failure to perform stated duties under this Agreement after written notice
thereof from the board of directors;

          (6) a willful violation of any law, rule or regulation (other than minor or routine traffic
violations or similar offenses) that reflects adversely on the reputation of the Corporation or its
affiliates, any felony conviction, any violation of law involving moral turpitude, or any violation
of a final cease-and-desist order; or

          (7) a material breach by the Executive of any provision of this Agreement.

No act, or failure to act, on the Executive’s part shall be considered “willful” unless he has
acted, or failed to act, with an absence of good faith and without reasonable belief that his
action or failure to act was in the best interest of the Corporation.

     3.3 Voluntary Termination by the Executive Without Good Reason. In addition to his
other rights to terminate his employment under this Agreement, Executive may voluntarily terminate
employment during the term of this Agreement upon at least ninety (90) days prior written notice to
the board of directors of the Corporation. Upon Executive’s voluntary termination, he will receive
only his compensation and vested rights and benefits to the date of his termination of employment.
Following his voluntary termination of employment under this Section 3.3, the Executive will be
subject to the restrictions set forth in Article 7.

4

 

     3.4 Involuntary Termination Without Cause and Voluntary Termination with Good Reason.
With written notice to the Executive at least thirty (30) days in advance, the Corporation may
terminate the Executive’s employment without Cause. Termination shall take effect at the end of
the notice period. With advance written notice to the Corporation as provided in clause (y), the
Executive may terminate employment for Good Reason. If the Executive’s employment terminates
involuntarily without Cause or voluntarily but with Good Reason, the Executive shall be entitled to
the benefits specified in Article 4 of this Agreement. For purposes of this Agreement, a voluntary
termination by the Executive shall be considered a voluntary termination with Good Reason if the
conditions stated in both clauses (x) and (y) of this Section 3.4 are satisfied:

     (x) a voluntary termination by the Executive shall be considered a voluntary termination with
Good Reason if any of the following occur without the Executive’s written consent, and the term
Good Reason shall mean the occurrence of any of the following without the Executive’s written
consent:

          (1) a failure to reelect or reappoint the Executive as [title] of the Corporation (provided,
however, that a change in the Executive’s position consented to in writing by the Executive, shall
not be deemed a Good Reason);

          (2) a material change in Executive’s position to become one of lesser responsibility,
importance, or scope from the position and attributes thereof described in Sections 1.1 and 1.2 of
this Agreement (provided, however, that a reduction in duties and responsibilities consented to in
writing by the Executive in connection with succession planning of the Corporation, shall not be
deemed a Good Reason);

          (3) a liquidation or dissolution of the Corporation, other than liquidations or dissolutions
that are caused by reorganizations that do not affect the status of the Executive;

          (4) a material reduction in Executive’s Base Salary or benefits required to be provided
hereunder (other than a reduction that is generally applicable to the Corporation’s executive
employees or a reduction or elimination of the Executive’s benefits under one or more benefit plans
maintained by the Corporation as part of a good faith, overall reduction or elimination of such
plans or benefits applicable to all participants in a manner that does not discriminate against the
Executive (except as such discrimination may be necessary to comply with applicable law));

          (5) a relocation of the Executive’s principal place of employment by more than twenty-five
(25) miles from its location as of the date of this Agreement; or

          (6) a material breach of this Agreement by the Corporation.

     (y) the Executive must give notice to the Corporation of the existence of one or more of the
conditions described in clause (x) within sixty (60) days after the initial existence of the
condition, and the Corporation shall have thirty (30) days thereafter to remedy the condition. In
addition, the Executive’s voluntary termination because of the existence of one or more of the
conditions described in clause (x) must occur within six (6) months after the initial existence of
the condition.

5

 

ARTICLE 4

SEVERANCE COMPENSATION

     4.1 Cash Severance after Termination Without Cause or Termination for Good Reason.

     (a) Subject to the possibility that cash severance after employment termination might be
delayed under Section 4.1(b), if the Executive’s employment terminates involuntarily but without
Cause or if the Executive voluntarily terminates employment with Good Reason, the Executive shall
for the unexpired term of this Agreement, plus an additional twelve (12) months, and in accordance
with the Corporation’s regular pay practices, continue to receive the Base Salary in effect at the
Executive’s termination of employment. However, the Corporation and the Executive acknowledge and
agree that the severance benefits under this Section 4.1 shall not be payable if severance benefits
are payable or shall have been paid to the Executive under Article 5 of this Agreement.

     (b) If when employment termination occurs the Executive is a “specified employee” within the
meaning of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), if the cash
severance payment under Section 4.1(a) would be considered deferred compensation under Section 409A
of the Code, and finally if an exemption from the six-month delay requirement of Section
409A(a)(2)(B)(i) of the Code is not available, the Executive’s continued Base Salary under Section
4.1(a) for the first six months after employment termination shall be paid to the Executive in a
single lump sum without interest on the first day of the seventh (7th) month after the
month in which the Executive’s employment terminates and all remaining payments shall be made as
originally scheduled. References in this Agreement to Section 409A of the Code include rules,
regulations, and guidance of general application issued by the Department of the Treasury under
Section 409A of the Code.

     4.2 Post-Termination Insurance Coverage.

     (a) If the Executive’s employment terminates involuntarily but without Cause or voluntarily
but with Good Reason, or because of disability, the Corporation shall continue or cause to be
continued at the Corporation’s expense medical and life insurance benefits for the Executive and
any of his dependents covered at the time of his termination. The medical insurance benefits shall
continue until the first to occur of (w) the Executive’s return to employment with the Corporation
or another employer, (x) the Executive’s attainment of age 65, (y) the Executive’s death, or (z)
the end of the term remaining under this Agreement when the Executive’s employment terminates.
Notwithstanding the foregoing, if the Executive’s employment terminate for any reason, other than
for Cause, after the Executive has attained age 55, the Corporation shall provide the Executive and
his dependents with medical insurance coverage that is not less favorable than the Corporation
provides for other executive officers, at no cost to the Executive, until the Executive first
becomes eligible for Medicare. This last sentence shall survive the expiration of this Agreement.

     (b) If (x) under the terms of the applicable policy or policies for the insurance benefits
specified in Section 4.2(a) it is not possible to continue coverage for the Executive and his
dependents, or (y) when employment termination occurs the Executive is a “specified employee”
within the meaning of Section 409A of the Code, if any of the continued insurance coverage benefits
specified in Section 4.2(a) would be considered deferred compensation under Section 409A of the
Code, and finally, if an exemption from the six-month delay requirement of Section 409A(a)(2)(B)(i)
of the Code is not available for that particular insurance benefit, the Corporation shall pay to
the Executive in a single lump sum an amount in cash equal to the present value of the
Corporation’s projected cost to maintain that particular insurance benefit (and associated income
tax gross-up benefit, if applicable) had the Executive’s employment not terminated, assuming
continued coverage for 36 months. The lump-sum payment shall be made thirty

6

 

(30) days after employment termination or, if Section 4.1(b) applies, on the first day of the
seventh (7th) month after the month in which the Executive’s employment terminates.

ARTICLE 5

CHANGE IN CONTROL BENEFITS

     5.1 Change in Control Benefits. If a Change in Control occurs during the term of this
Agreement and, thereafter, the Executive’s employment terminates involuntarily but without Cause or
if the Executive voluntarily terminates employment with Good Reason, the Corporation shall make or
cause to be made a lump-sum payment to the Executive in an amount in cash equal to three (3) times
the Executive’s average annual compensation. For this purpose, average annual compensation means
the Executive’s taxable income reported by the Corporation (or any affiliate of the Corporation)
for the five (5) calendar years immediately preceding the calendar year in which the Change in
Control occurs. The payment required under this paragraph is payable no later than five (5)
business days after the Executive’s termination of employment. If the Executive receives payment
under Section 5.1, the Executive shall not be entitled to any additional severance benefits under
Section 4.1 of this Agreement. In addition to the cash severance benefit provided for under this
Section 5.1, the Corporation shall provide the Executive with the post-termination insurance
coverage described in Section 4.2(a) of this Agreement, subject to the provisions of Section 4.2(b)
of this Agreement.

     5.2 Change in Control Defined. For purposes of this Agreement “Change in Control”
means a change in control as defined in Section 409A of the Code and rules, regulations, and
guidance of general application thereunder issued by the Department of the Treasury, including:

     (a) Change in ownership: a change in ownership of the Corporation occurs on the date
any one person or group accumulates ownership of Corporation stock constituting more than 50% of
the total fair market value or total voting power of Corporation stock;

     (b) Change in effective control: (x) any one person or more than one person acting as
a group acquires within a 12-month period ownership of Corporation stock possessing 30% or more of
the total voting power of Corporation stock, or (y) a majority of the Corporation’s board of
directors is replaced during any 12-month period by directors whose appointment or election is not
endorsed in advance by a majority of the Corporation’s board of directors; or

     (c) Change in ownership of a substantial portion of assets: a change in ownership of a
substantial portion of the Corporation’s assets occurs if in a 12-month period any one person or
more than one person acting as a group acquires from the Corporation assets having a total gross
fair market value equal to or exceeding 40% of the total gross fair market value of all of the
Corporation’s assets immediately before the acquisition or acquisitions. For this purpose, gross
fair market value means the value of the Corporation’s assets, or the value of the assets being
disposed of, determined without regard to any liabilities associated with the assets.

     5.3 Potential Limitation of Benefits Under Certain Circumstances. Notwithstanding any
other provisions of this Agreement, in the event that (x) the aggregate payments or benefits to be
made or afforded to the Executive under this Agreement or otherwise, which are deemed to be
parachute payments as defined in Section 280G of the Code or any successor thereof (the
“Termination Benefits”) would be deemed to include an “excess parachute payment” under Section 280G
of the Code; and (y) if such Termination Benefits were reduced to an amount (the “Non-Triggering
Amount”), the value of which is one dollar ($1.00) less than an amount equal to three (3) times the
Executive’s “base amount,” as determined in accordance with Section 280G of the Code and the
Non-Triggering Amount less the product of the marginal rate of any applicable state and federal
income tax and the Non-Triggering

7

 

Amount would be greater than the aggregate value of the Termination Benefits (without such
reduction) minus (1) the amount of tax required to be paid by the Executive thereon by Section 4999
of the Code and further minus (2) the product of the Termination Benefits and the marginal rate of
any applicable state and federal income tax, then the Termination Benefits shall be reduced to the
Non-Triggering Amount. The allocation of the reduction required hereby among the Termination
Benefits shall be determined by the Executive. The Corporation’s independent public accountants
will determine the value of any reduction in the payments and benefits; the Corporation will pay
for the accountants’ opinion. The Corporation may request, and the Executive has the right to
demand that, a ruling from the IRS as to whether any disputed payments and benefits have adverse
tax consequences. The Corporation will promptly prepare and file the request for a ruling from the
IRS, but in no event will the Corporation make this filing later than thirty (30) days from the
date of the accountant’s opinion referred to above. The request will be subject to the Executive’s
approval prior to filing; the Executive shall not unreasonably withhold his approval. The
Corporation and the Executive agree to be bound by any ruling received from the IRS and to make
appropriate payments to each other to reflect any IRS rulings, together with interest at the
applicable federal rate provided for in Section 7872(f)(2) of the Code. Nothing contained in this
Agreement shall result in a reduction of any payments or benefits to which the Executive may be
entitled upon termination of employment other than pursuant to Sections 4 and 5 hereof, or a
reduction in the payments and benefits specified, below zero.

ARTICLE 6

CONFIDENTIALITY AND CREATIVE WORK

     6.1 Non-disclosure. The Executive covenants and agrees not to reveal to any person,
firm, or corporation any confidential information of any nature concerning the Corporation or its
business, or anything connected therewith. As used in this Article 6 the term “confidential
information” means all of the Corporation’s and the Corporation’s affiliates’ confidential and
proprietary information and trade secrets in existence on the date hereof or existing at any time
during the term of this Agreement, including but not limited to:

     (a) the whole or any portion or phase of any business plans, financial information, purchasing
data, supplier data, accounting data, or other financial information;

     (b) the whole or any portion or phase of any research and development information, design
procedures, algorithms or processes, or other technical information;

     (c) the whole or any portion or phase of any marketing or sales information, sales records,
customer lists, prices, sales projections, or other sales information; and

     (d) trade secrets, as defined from time to time by the laws of Tennessee.

     This Section 6.1 does not prohibit disclosure required by an order of a court having
jurisdiction or a subpoena from an appropriate governmental agency or disclosure made by the
Executive in the ordinary course of business and within the scope of the Executive’s authority.

     6.2 Return of Materials. The Executive agrees to immediately deliver or return to the
Corporation upon termination, upon expiration of this Agreement, or as soon thereafter as possible,
all written information and any other similar items furnished by the Corporation or prepared by the
Executive in connection with the Executive’s services hereunder and to immediately delete all
electronically stored data of the Corporation maintained on the Executive’s personal computers and
to return all Corporation-provided computers or communication devices (i.e., laptop, Blackberry,
PDA,

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etc.). The Executive will retain no copies thereof after termination of this Agreement or
termination of the Executive’s employment.

     6.3 Creative Work. The Executive agrees that all creative work and work product,
including but not limited to all technology, business management tools, processes, software,
patents, trademarks, and copyrights developed by the Executive during the term of this Agreement,
regardless of when or where such work or work product was produced, constitutes work made for hire,
all rights of which are owned by the Corporation. The Executive hereby assigns to the Corporation
all rights, title, and interest, whether by way of copyrights, trade secret, trademark, patent, or
otherwise, in all such work or work product, regardless of whether the same is subject to
protection by patent, trademark, or copyright laws.

     6.4 Affiliates’ Confidential Information is Covered; Confidentiality Obligation Survives
Termination. For purposes of this Agreement, the term “affiliate” of the Corporation includes
any entity that directly, or indirectly through one or more intermediaries, controls, is controlled
by, or is under common control of the Corporation. The rights and obligations set forth in this
Article 6 shall survive termination of this Agreement.

     6.5 Injunctive Relief. The Executive acknowledges that it is impossible to measure in
money the damages that will accrue to the Corporation if the Executive fails to observe the
obligations imposed by this Article 6. Accordingly, if the Corporation institutes an action to
enforce the provisions hereof, the Executive hereby waives the claim or defense that an adequate
remedy at law is available to the Corporation, and the Executive agrees not to urge in any such
action the claim or defense that an adequate remedy at law exists. The confidentiality and
remedies provisions of this Article 6 shall be in addition to and shall not be deemed to supersede
or restrict, limit, or impair the Corporation’s rights under applicable state or federal statute or
regulation dealing with or providing a remedy for the wrongful disclosure, misuse, or
misappropriation of trade secrets or proprietary or confidential information.

ARTICLE 7

COMPETITION AFTER EMPLOYMENT TERMINATION

     7.1 Covenant Not to Solicit Employees. The Executive agrees not to, directly or
indirectly, solicit or employ the services of any officer or employee of the Corporation or its
affiliates (including an individual who was an officer or employee of the Corporation or its
affiliates during the one year period following the Executive’s termination) for two years after
the Executive’s employment termination.

     7.2 Covenant Not to Compete.

     (a) The Executive covenants and agrees not to compete directly or indirectly with the
Corporation or its affiliates for one year after employment termination. For purposes of this
Section 7.2:

	 	(1)	 	the term compete means:

	 	(i)	 	providing financial products or services on
behalf of any financial institution for any person residing in the
territory,
	 
	 	(ii)	 	assisting (other than through the performance
of ministerial or clerical duties) any financial institution in
providing financial products or services to any person residing in the
territory, or
	 
	 	(iii)	 	inducing or attempting to induce any person
who was a customer of the Corporation or its affiliates at the date of
the Executive’s employment

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	 	 	 	termination to seek financial products or services from another
financial institution.

	 	(2)	 	the words directly or indirectly mean:

	 	(i)	 	acting as a consultant, officer, director,
independent contractor, or employee of any financial institution in
competition with the Corporation or its affiliates in the territory, or
	 
	 	(ii)	 	communicating to such financial institution the
names or addresses or any financial information concerning any person
who was a customer of the Corporation or its affiliates when the
Executive’s employment terminated.

	 	(3)	 	the term customer means any person to whom the Corporation or
its affiliates is providing financial products or services on the date of the
Executive’s employment termination or within one year thereafter.
	 
	 	(4)	 	the term financial institution means any bank, savings
association, or bank or savings association holding company, or any other
institution, the business of which is engaging in activities that are financial
in nature or incidental to such financial activities as described in Section
4(k) of the Bank Holding Company Act of 1956, other than the Corporation or any
of its affiliated corporations.
	 
	 	(5)	 	financial product or service means any product or service that
a financial institution or a financial holding company could offer by engaging
in any activity that is financial in nature or incidental to such a financial
activity under Section 4(k) of the Bank Holding Company Act of 1956 and that is
offered by the Corporation or its affiliates or an affiliate on the date of the
Executive’s employment termination, including but not limited to banking
activities and activities that are closely related and a proper incident to
banking.
	 
	 	(6)	 	the term person means any individual or individuals,
corporation, partnership, fiduciary or association.
	 
	 	(7)	 	the term territory means the area within a 30-mile radius of
any office of the Corporation at the date of the Executive’s employment
termination.

     (b) If any provision of this Article 7 or any word, phrase, clause, sentence or other portion
thereof (including, without limitation, the geographical and temporal restrictions contained
therein) is held to be unenforceable or invalid for any reason, the unenforceable or invalid
provision or portion shall be modified or deleted so that the provisions hereof, as modified, are
legal and enforceable to the fullest extent permitted under applicable law.

     (c) The Executive acknowledges that the Corporation’s willingness to enter into this Agreement
and to make the payments contemplated by Articles 3 and 4 of this Agreement is conditioned on the
Executive’s acceptance of the covenants set forth in Articles 6 and 7 of this Agreement and that
the Corporation would not have entered into this Agreement without such covenants in force.

     7.3 Injunctive and Other Relief. Because of the unique character of the services to be
rendered by the Executive hereunder, the Executive understands that the Corporation would not have
an

10

 

adequate remedy at law for the material breach or threatened breach by the Executive of any
one or more of the Executive’s covenants in this Article 7. Accordingly, the Executive agrees that
the Corporation’s remedies for a breach of this Article 7 include, but are not limited to, (x)
forfeiture of any money representing accrued salary, contingent payments, or other fringe benefits
(including any amount payable pursuant to Article 4) due and payable to the Executive during the
period of any breach by the Executive, and (y) a suit in equity by the Corporation to enjoin the
Executive from the breach or threatened breach of such covenants. The Executive hereby waives the
claim or defense that an adequate remedy at law is available to the Corporation and the Executive
agrees not to urge in any such action the claim or defense that an adequate remedy at law exists.
Nothing herein shall be construed to prohibit the Corporation from pursuing any other or additional
remedies for the breach or threatened breach.

     7.4 Article 7 Survives Termination But Is Void After a Change in Control. The rights
and obligations set forth in this Article 7 shall survive termination of this Agreement. However,
Article 7 shall become null and void effective immediately upon a Change in Control.

ARTICLE 8

MISCELLANEOUS

     8.1 Successors and Assigns.

     (a) This Agreement shall be binding upon the Corporation and any successor to the Corporation,
including any persons acquiring directly or indirectly all or substantially all of the business or
assets of the Corporation by purchase, merger, consolidation, reorganization, or otherwise, but
this Agreement and the Corporation’s obligations under this Agreement are not otherwise assignable,
transferable, or delegable by the Corporation. By agreement in form and substance satisfactory to
the Executive, the Corporation shall require any successor to all or substantially all of the
business or assets of the Corporation expressly to assume and agree to perform this Agreement in
the same manner and to the same extent the Corporation would be required to perform had no
succession occurred.

     (b) This Agreement shall inure to the benefit of and be enforceable by the Executive’s
personal or legal representatives, executors, administrators, successors, heirs, distributees, and
legatees.

     (c) Without written consent of the other parties, no party shall assign, transfer, or delegate
this Agreement or any rights or obligations under this Agreement, except as expressly provided
herein. Without limiting the generality or effect of the foregoing, the Executive’s right to
receive payments hereunder is not assignable or transferable, whether by pledge, creation of a
security interest, or otherwise, except for a transfer by the Executive’s will or by the laws of
descent and distribution. If the Executive attempts an assignment or transfer that is contrary to
this Section 8.1, the Corporation shall have no liability to pay any amount to the assignee or
transferee.

     8.2 Governing Law, Jurisdiction and Forum. This Agreement shall be construed under and
governed by the internal laws of the State of Tennessee, without giving effect to any conflict of
laws provision or rule that would cause the application of the laws of any jurisdiction other than
Tennessee. By entering into this Agreement, the Executive acknowledges that the Executive is
subject to the jurisdiction of both the federal and state courts in Tennessee.

     8.3 Entire Agreement. This Agreement sets forth the entire agreement of the parties
concerning the employment of the Executive by the Corporation. Any oral or written statements,
representations, agreements, or understandings made or entered into prior to or contemporaneously
with the execution of this Agreement are hereby rescinded, revoked, and rendered null and void by
the parties.

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     8.4 Notices. All notices, requests, demands, and other communications hereunder shall
be in writing and shall be deemed to have been duly given if delivered by hand or mailed, certified
or registered mail, return receipt requested, with postage prepaid. Unless otherwise changed by
notice, notice shall be properly addressed to the Executive if addressed to the address of the
Executive on the books and records of the Corporation at the time of the delivery of such notice,
and properly addressed to the Corporation if addressed to the board of directors of the Corporation
at the Corporation’s executive offices.

     8.5 Severability. If there is a conflict between any provision of this Agreement and
any statute, regulation, or judicial precedent, the latter shall prevail, but the affected
provisions of this Agreement shall be curtailed and limited solely to the extent necessary to bring
them within the requirements of law. If any provisions of this Agreement is held by a court of
competent jurisdiction to be indefinite, invalid, void or voidable, or otherwise unenforceable, the
remainder of this Agreement shall continue in full force and effect unless that would clearly be
contrary to the intentions of the parties or would result in an injustice.

     8.6 Captions and Counterparts. The captions in this Agreement are solely for
convenience. The captions do not define, limit, or describe the scope or intent of this Agreement.
This Agreement may be executed in several counterparts, each of which shall be deemed to be an
original but all of which together shall constitute one and the same instrument.

     8.7 No Duty to Mitigate. The Executive shall not be required to mitigate the amount
of any payment provided for in this Agreement by seeking other employment. Moreover, provided the
Executive is not in breach of any obligation under Articles 6 and 7 of this Agreement, the amount
of any payment provided for in this Agreement shall not be reduced by any compensation earned or
benefits provided as the result of employment of the Executive or as a result of the Executive
being self-employed after employment termination.

     8.8 Amendment and Waiver. This Agreement may not be amended, released, discharged,
abandoned, changed, or modified in any manner, except by an instrument in writing signed by each of
the parties hereto. The failure of any party hereto to enforce at any time any of the provisions
of this Agreement shall not be construed to be a waiver of any such provision, nor affect the
validity of this Agreement or any part thereof or the right of any party thereafter to enforce each
and every such provision. No waiver or any breach of this Agreement shall be held to be a waiver
of any other or subsequent breach.

     8.9 Compliance with Internal Revenue Code Section 409A. The Corporation and the
Executive intend that their exercise of authority or discretion under this Agreement shall comply
with Section 409A of the Code. If any provision of this Agreement does not satisfy the
requirements of Section 409A of the Code, the provision shall nevertheless be applied in a manner
consistent with those requirements. If any provision of this Agreement would subject the Executive
to additional tax or interest under Section 409A of the Code, the Corporation shall reform the
provision. However, the Corporation shall maintain to the maximum extent practicable the original
intent of the applicable provision without subjecting the Executive to additional tax or interest,
and the Corporation shall not be required to incur any additional compensation expense as a result
of the reformed provision.

     8.10 Source of Payments. Notwithstanding any provision in this Agreement to the
contrary, to the extent payments and benefits, as provided for under this Agreement, are paid or
received by the Executive under an employment agreement in effect between the Executive and the
Bank, the payments and benefits paid by the Bank will be subtracted from any amount or benefit due
simultaneously to the Executive under similar provisions of this Agreement. Payments will be
allocated in proportion to the

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level of activity and the time expended by the Executive on activities related to the
Corporation and the Bank, respectively, as determined by the Corporation and the Bank.

[signature page to follow]

13

 

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

	 	 	 	 	 
	 	ATHENS BANCSHARES CORPORATION

 	 
	 	
 	 
	 	[Name] 	 
	 	For the Board of Directors 	 
	 
	 	 	 
	 	
 	 
	 	[Executive]  	 
	 	 	 

14

 

	 	 	 	 	 

Appendix A

Automobile Allowance

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