Document:

exh101.htm

     

    
      

      

    

    Exhibit
      10.1

     

     

    
      AMENDED
        AND RESTATED EMPLOYMENT AGREEMENT

      

      

      THIS
        AMENDED AND RESTATED EMPLOYMENT
        AGREEMENT, dated this 14th day of
        December,
        2007, is between First Federal Bancshares of Arkansas, Inc., a Texas chartered
        corporation (the “Corporation”), First Federal Bank, a federally chartered
        savings bank and a wholly owned subsidiary of the Corporation (the “Bank”), and
        Larry J. Brandt (the “Executive”).

      

      WITNESSETH

      

      WHEREAS,
        the Bank was previously known
        as First Federal Bank of Arkansas, F.A.;

      

      WHEREAS,
        the Executive is currently
        employed as the President and Chief Executive Officer of the Corporation
        and as
        Chairman of the Board and Chief Executive Officer of the Bank, and the
        Corporation, the Bank and the Executive have previously entered into an
        employment agreement dated May 3, 1996, as amended on July 22, 1998, April
        27,
        2000, April 25, 2002 and January 24, 2006 (the “Prior Agreement”);

      

      WHEREAS,
        the Corporation and the Bank
        (together the “Employers”) desire to amend and restate the Prior Agreement in
        order to make changes to comply with Section 409A of the Internal Revenue
        Code
        of 1986, as amended (the “Code”), as well as certain other changes;

      

      WHEREAS,
        the Employers desire to be
        ensured of the Executive’s continued active participation in the business of the
        Employers; and

      

      WHEREAS,
        in order to induce the
        Executive to remain in the employ of the Employers and in consideration of
        the
        Executive’s agreeing to remain in the employ of the Employers, the parties
        desire to specify the severance benefits which shall be due the Executive
        in the
        event that his employment with the Employers is terminated under specified
        circumstances;

      

      NOW
        THEREFORE, in consideration of the
        premises and the mutual agreements herein contained, the parties hereby agree
        as
        follows:

      

      1.            
        Definitions.  The following words and terms shall
        have the meanings set forth below for the purposes of this
        Agreement:

      

      (a)           Average
        Annual Compensation.  The Executive’s “Average Annual
        Compensation” for purposes of this Agreement shall be deemed to mean the average
        level of compensation paid to the Executive by the Employers or any subsidiary
        thereof during the most recent five taxable years preceding the year in which
        the Date of Termination occurs (or such shorter period as the Executive was
        employed), and which was included in the Executive=s
        gross
        income for tax purposes, including but not limited to Base Salary, bonuses,
        director=s
        fees, if
        applicable, and all other amounts taxable to the Executive pursuant to any
        employee benefit plans of the Employers.

      

      (b)           Base
        Salary.  “Base Salary” shall have the meaning set forth in
        Section 3(a) hereof.

       

      
 

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      (c)           Cause.
        Termination of the Executive’s employment for “Cause” shall mean termination
        because of personal dishonesty, incompetence, willful misconduct, breach
        of
        fiduciary duty involving personal profit, intentional failure to perform
        stated
        duties, willful violation of any law, rule or regulation (other than traffic
        violations or similar offenses) or final cease-and-desist order or material
        breach of any provision of this Agreement.  For purposes of this
        paragraph, no act or failure to act on the Executive’s part shall be considered
“willful” unless done, or omitted to be done, by the Executive not in good faith
        and without reasonable belief that the Executive’s action or omission was in the
        best interest of the Employers.

      

      (d)           Change
        in Control.  “Change in Control” shall mean a change in the
        ownership of the Corporation or the Bank, a change in the effective control
        of
        the Corporation or the Bank or a change in the ownership of a substantial
        portion of the assets of the Corporation or the Bank, in each case as provided
        under Section 409A of the Code and the regulations thereunder.

      

      (e)           Date
        of Termination.  “Date of Termination” shall mean (i) if the
        Executive’s employment is terminated for Cause, the date on which the Notice of
        Termination is given, (ii) if the Executive’s employment is terminated due to
        death, the date of death, and (iii) if the Executive’s employment is terminated
        for any other reason, the date specified in such Notice of
        Termination.

      

      (f)           
        Disability.  “Disability” shall mean the Executive
        (i) is unable to engage in any substantial gainful activity by reason of
        any
        medically determinable physical or mental impairment which can be expected
        to
        result in death or can be expected to last for a continuous period of not
        less
        than 12 months, or (ii) is, by reason of any medically determinable physical
        or
        mental impairment which can be expected to result in death or can be expected
        to
        last for a continuous period of not less than 12 months, receiving income
        replacement benefits for a period of not less than three months under an
        accident and health plan covering employees of the Employers.

      

      (g)           Effective
        Date.  The Effective Date of this Agreement shall mean the
        date first written above.

      

      (h)           Good
        Reason.  Termination by the Executive of the Executive’s
        employment for “Good Reason” shall mean termination by the Executive based on
        the occurrence of any of the following events:

      

      (i)
        any
        material breach of this Agreement by the Employers, including without limitation
        any of the following: (A) a material diminution in the Executive’s base
        compensation, (B) a material diminution in the Executive’s authority, duties or
        responsibilities as prescribed in Section 2, or (C) any requirement that
        the
        Executive report to a corporate officer or employee of the Employers instead
        of
        reporting directly to the Boards of Directors of the Employers; or

       

      
 

      
        
          
          

        

        
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      (ii)
        any
        material change in the geographic location at which the Executive must perform
        his services under this Agreement;

      

      provided,
        however, that prior to any termination of employment for Good Reason, the
        Executive must first provide written notice to the Employers within ninety
        (90)
        days of the initial existence of the condition, describing the existence
        of such
        condition, and the Employers shall thereafter have the right to remedy the
        condition within thirty (30) days of the date the Employers received the
        written
        notice from the Executive.  If the Employers remedy the condition
        within such thirty (30) day cure period, then no Good Reason shall be deemed
        to
        exist with respect to such condition.  If the Employers do not remedy
        the condition within such thirty (30) day cure period, then the Executive
        may
        deliver a Notice of Termination for Good Reason at any time within sixty
        (60)
        days following the expiration of such cure period.

      

      (i)           IRS.  IRS
        shall mean the Internal Revenue Service.

      

      (j)           Notice
        of Termination.  Any purported termination of the Executive’s
        employment by the Employers for any reason, including without limitation
        for
        Cause, Disability or Retirement, or by the Executive for any reason, including
        without limitation for Good Reason, shall be communicated by a written “Notice
        of Termination” to the other party hereto.  For purposes of this
        Agreement, a “Notice of Termination” shall mean a dated notice which (i)
        indicates the specific termination provision in this Agreement relied upon,
        (ii)
        sets forth in reasonable detail the facts and circumstances claimed to provide
        a
        basis for termination of the Executive’s employment under the provision so
        indicated, (iii) specifies a Date of Termination, which shall be not less
        than
        thirty (30) nor more than ninety (90) days after such Notice of Termination
        is
        given, except in the case of the Employers’ termination of Executive’s
        employment for Cause; and (iv) is given in the manner specified in Section
        10
        hereof.

      

      (k)           Retirement.  “Retirement”
        shall mean voluntary termination by the Executive in accordance with the
        Employers’ retirement policies, including early retirement, generally applicable
        to the Employers’ salaried employees.

      

      2.           Term
        of Employment.

      

      (a)           The
        Employers hereby employ the Executive as President and Chief Executive Officer
        of the Corporation and as Chairman of the Board and Chief Executive Officer
        of
        the Bank, and the Executive hereby accepts said employment and agrees to
        render
        such services to the Employers on the terms and conditions set forth in this
        Agreement. Unless extended as provided in this Section 2, this Agreement
        shall
        terminate three (3) years after December 14, 2007 (the “Commencement Date”).
        Prior to the first annual anniversary of the Commencement Date and each annual
        anniversary thereafter, the Boards of Directors of the Employers shall consider,
        review (with appropriate corporate documentation thereof, and after taking
        into
        account all relevant factors, including the Executive’s performance) and, if
        appropriate, explicitly approve a one-year extension of the remaining term
        of
        this Agreement.  The term of this Agreement shall continue to extend
        each year if the Boards of Directors so approve such extension unless the
        Executive gives written notice to the Employers of the Executive’s election not
        to extend the term, with such notice to be given not less than thirty (30)
        days
        prior to any such anniversary date.  If the Boards of Directors elect
        not to extend the term, they shall give written notice of such decision to
        the
        Executive not less than thirty (30) days prior to any such anniversary
        date.  If any party gives timely notice that the term will not be
        extended as of any annual anniversary date, then this Agreement shall terminate
        at the conclusion of its remaining term.  References herein to the
        term of this Agreement shall refer both to the initial term and successive
        terms.

       

      
 

      
        
          
          

        

        
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      (b)           During
        the term of this Agreement, the Executive shall perform such executive services
        for the Employers as are consistent with his titles of President and Chief
        Executive Officer of the Corporation and as Chairman and Chief Executive
        Officer
        of the Bank.

      

      3.           Compensation
        and Benefits.

      

      (a)           The
        Employers shall compensate and pay Executive for his services during the
        term of
        this Agreement at a minimum base salary of $325,000 per year (“Base Salary”),
        which may be increased from time to time in such amounts as may be determined
        by
        the Boards of Directors of the Employers.  In addition to his Base
        Salary, the Executive shall be entitled to receive during the term of this
        Agreement such bonus payments as may be determined by the Boards of Directors
        of
        the Employers.

      

      (b)           During
        the term of the Agreement, Executive shall be entitled to participate in
        and
        receive the benefits of any pension or other retirement benefit plan, profit
        sharing, stock option, employee stock ownership, or other plans, benefits
        and
        privileges given to employees and executives of the Employers, to the extent
        commensurate with his then duties and responsibilities, as fixed by the Boards
        of Directors of the Employers.  The Employers shall not make any
        changes in such plans, benefits or privileges which would adversely affect
        Executive’s rights or benefits thereunder, unless such change occurs pursuant to
        a program applicable to all executive officers of the Employers and does
        not
        result in a proportionately greater adverse change in the rights of or benefits
        to Executive as compared with any other executive officer of the
        Employers.  Nothing paid to Executive under any plan or arrangement
        presently in effect or made available in the future shall be deemed to be
        in
        lieu of the salary payable to the Executive pursuant to Section 3(a)
        hereof.

      

      (c)           During
        the term of this Agreement, the Executive shall be entitled to paid annual
        vacation in accordance with the policies as established from time to time
        by the
        Boards of Directors of the Employers.  The Executive shall not be
        entitled to receive any additional compensation from the Employers for failure
        to take a vacation, nor shall the Executive be able to accumulate unused
        vacation time from one year to the next, except to the extent authorized
        by the
        Boards of Directors of the Employers.

      

      (d)           During
        the term of this Agreement, in keeping with past practices, the Employers
        shall
        continue to provide the Executive with the automobile he presently drives.
        The
        Employers shall be responsible and shall pay for all costs of insurance
        coverage, repairs, maintenance and other incidental expenses, including license,
        fuel and oil.  If such costs or expenses are initially paid by the
        Executive, the Employers shall reimburse the Executive therefor.  Such
        reimbursement shall be paid promptly by the Employers and in any event no
        later
        than March 15 of the year immediately following the year in which such expenses
        were incurred.  The Employers shall provide the Executive with a
        replacement automobile of a similar type as selected by the Executive at
        approximately the time that his present automobile reaches three (3) years
        of
        age and approximately every three (3) years thereafter, upon the same terms
        and
        conditions.

       

      
 

      
        
          
          

        

        
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      (e)           During
        the term of this Agreement, in keeping with past practices, the Employers
        shall
        continue to pay the annual membership dues at the country clubs which the
        Executive is currently a member.  If such dues are initially paid by
        the Executive, the Employers shall reimburse the Executive
        therefor.  Such reimbursement shall be paid promptly by the Employers
        and in any event no later than March 15 of the year immediately following
        the
        year in which such dues were paid.

      

      (f)           The
        Employers shall provide continued medical insurance in the Employers’ health
        plan for the benefit of the Executive and his spouse for a period of five
        years
        from the date of the Executive’s Retirement, and such insurance shall be
        comparable to that which is provided by the Employers to comparable executive
        officers and regardless of whether the Executive is eligible to participate
        in
        the Employers’ health plan.  In the event of the Executive’s death
        before the expiration date of such five year period, the Employers shall
        provide
        the Executive’s spouse continued medical insurance in the Employers’ health plan
        comparable to that which is being provided to the Executive’s spouse at such
        time for the remainder of such five year period.  Any insurance
        premiums payable by the Employers or any successors pursuant to this Section
        3(f) shall be payable at such times and in such amounts as if the Executive
        was
        still an employee of the Employers, subject to any increases in such amounts
        imposed by the insurance company or COBRA, and the amount of insurance premiums
        required to be paid by the Employers in any taxable year shall not affect
        the
        amount of insurance premiums required to be paid by the Employers in any
        other
        taxable year; and provided further that if the Executive’s participation in any
        group insurance plan is barred, the Employers shall either arrange to provide
        the Executive with insurance benefits substantially similar to those which
        the
        Executive was entitled to receive under such group insurance plan or, if
        such
        coverage cannot be obtained, pay a lump sum cash equivalency amount within
        thirty (30) days following the Date of Termination based on the annualized
        rate
        of premiums being paid by the Employers as of the Date of Termination. This
        Section 3(f) shall not apply if the Executive is or becomes employed full-time
        by an employer other than the Corporation or the Bank.

      

      (g)           In
        the event of the Executive’s death during the term of this Agreement, the
        Executive’s spouse, estate, legal representative or named beneficiaries (as
        directed by the Executive in writing) shall be paid on a monthly basis the
        Executive’s Base Salary (as defined in Section 3(a) hereof) in effect at the
        time of the Executive’s death for a period of twelve (12) months from the date
        of the Executive’s death.

      

      (h)           The
        Executive’s compensation and expenses shall be paid by the Corporation and the
        Association in the same proportion as the time and services actually expended
        by
        the Executive on behalf of each respective Employer.

       

      
 

      
        
          
          

        

        
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      4.           Expenses.  The
        Employers shall reimburse Executive or otherwise provide for or pay for all
        reasonable expenses incurred by Executive in furtherance of, or in connection
        with the business of the Employers, including, but not by way of limitation,
        automobile and traveling expenses, and all reasonable entertainment expenses
        (whether incurred at the Executive’s residence, while traveling or otherwise),
        subject to such reasonable documentation and other limitations as may be
        established by the Boards of Directors of the Employers.  If such
        expenses are paid in the first instance by Executive, the Employers shall
        reimburse the Executive therefor.  Such reimbursement shall be paid
        promptly by the Employers and in any event no later than March 15 of the
        year
        immediately following the year in which such expenses were
        incurred.

      

      5.           Termination.

      

      (a)           The
        Employers shall have the right, at any time upon prior Notice of Termination,
        to
        terminate the Executive’s employment hereunder for any reason, including without
        limitation termination for Cause, Disability or Retirement, and the Executive
        shall have the right, upon prior Notice of Termination, to terminate his
        employment hereunder for any reason.

      

      (b)           In
        the event that (i) Executive’s employment is terminated by the Employers for
        Cause, or (ii) the Executive terminates his employment hereunder other than
        for
        Good Reason, the Executive shall have no right pursuant to this Agreement
        to
        compensation or other benefits for any period after the applicable Date of
        Termination.  In the event that the Executive’s employment is
        terminated due to Disability or Retirement, the Executive’s rights shall be as
        provided in Section 3(f) hereof.  In the event the Executive’s
        employment is terminated due to the Executive’s death, the Executive’s rights
        shall be as provided in Section 3(g) hereof.

      

      (c)           In
        the event that (i) the Executive’s employment is terminated by the Employers for
        other than Cause, Disability, Retirement or the Executive’s death or (ii) such
        employment is terminated by the Executive for Good Reason, then the Employers
        shall, subject to the provisions of Section 6 hereof, if
        applicable,

      

      (A)           pay
        to the Executive, in a lump sum within ten (10) business days following the
        Date
        of Termination, a cash severance amount equal to three (3) times the Executive’s
        Average Annual Compensation, and

      

      (B)           maintain
        and provide for a period ending at the earlier of (i) the expiration of the
        remaining term of employment pursuant hereto prior to giving effect to the
        Notice of Termination or (ii) the date of the Executive’s full-time employment
        by another employer (provided that the Executive is entitled under the terms
        of
        such employment to benefits substantially similar to those described in this
        subparagraph (B)), at no cost to the Executive, the Executive’s continued
        participation in all group insurance, life insurance, health and accident
        insurance, and disability insurance in which the Executive was participating
        immediately prior to the Date of Termination; provided that any
        insurance premiums payable by the Employers or any successors pursuant to
        this
        Section 5(c)(B) shall be payable at such times and in such amounts as if
        the
        Executive was still an employee of the Employers, subject to any increases
        in
        such amounts imposed by the insurance company or COBRA, and the amount of
        insurance premiums required to be paid by the Employers in any taxable year
        shall not affect the amount of insurance premiums required to be paid by
        the
        Employers in any other taxable year; and provided further that if the
        Executive’s participation in any group insurance plan is barred, the Employers
        shall either arrange to provide the Executive with insurance benefits
        substantially similar to those which the Executive was entitled to receive
        under
        such group insurance plan or, if such coverage cannot be obtained, pay a
        lump
        sum cash equivalency amount within thirty (30) days following the Date of
        Termination based on the annualized rate of premiums being paid by the Employers
        as of the Date of Termination; and

       

      
 

      
        
          
          

        

        
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      (C)           pay
        to the Executive, in a lump sum within thirty (30) days following the Date
        of
        Termination, a cash amount equal to the projected cost to the Employers of
        providing benefits to the Executive for the remaining term of employment
        under
        this Agreement (prior to giving effect to the Notice of Termination) pursuant
        to
        any other employee benefit plans, programs or arrangements offered by the
        Employers in which the Executive was entitled to participate immediately
        prior
        to the Date of Termination (excluding (y) stock option plans, restricted
        stock
        plans and employee stock ownership plans of the Employers and (z) bonuses
        and
        other items of cash compensation), with the projected cost to the Employers
        to
        be based on the costs incurred for the calendar year immediately preceding
        the
        year in which the Date of Termination occurs and with any automobile-related
        costs to exclude any depreciation on Bank-owned automobiles.

      

      6.           Limitation
        of Benefits under Certain Circumstances.  If the payments and
        benefits pursuant to Section 5 hereof, either alone or together with other
        payments and benefits which the Executive has the right to receive from the
        Employers, would constitute a “parachute payment” under Section 280G of the
        Code, then the payments and benefits pursuant to Section 5 hereof shall be
        reduced by the minimum amount necessary to result in no portion of the payments
        and benefits under Section 5 being non-deductible to either of the Employers
        pursuant to Section 280G of the Code and subject to the excise tax imposed
        under
        Section 4999 of the Code.  If the payments and benefits under Section
        5 are required to be reduced, the cash severance shall be reduced first,
        followed by a reduction in the fringe benefits.  The determination of
        any reduction in the payments and benefits to be made pursuant to Section
        5
        shall be based upon the opinion of independent tax counsel selected by the
        Employers and paid by the Employers.  Such counsel shall promptly
        prepare the foregoing opinion, but in no event later than thirty (30) days
        from
        the Date of Termination, and may use such actuaries as such counsel deems
        necessary or advisable for the purpose.  Nothing contained in this
        Section 6 shall result in a reduction of any payments or benefits to which
        the
        Executive may be entitled upon termination of employment under any circumstances
        other than as specified in this Section 6, or a reduction in the payments
        and
        benefits specified in Section 5 below zero.

      

      7.           Mitigation;
        Exclusivity of Benefits.

      

      (a)           The
        Executive shall not be required to mitigate the amount of any benefits hereunder
        by seeking other employment or otherwise, nor shall the amount of any such
        benefits be reduced by any compensation earned by the Executive as a result
        of
        employment by another employer after the Date of Termination or otherwise,
        except as set forth in Sections 3(f) and 5(c)(B)(ii) hereof.

       

      
 

      
        
          
          

        

        
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      (b)           The
        specific arrangements referred to herein are not intended to exclude any
        other
        benefits which may be available to the Executive upon a termination of
        employment with the Employers pursuant to employee benefit plans of the
        Employers or otherwise.

      

      8.           Withholding.  All
        payments required to be made by the Employers hereunder to the Executive
        shall
        be subject to the withholding of such amounts, if any, relating to tax and
        other
        payroll deductions as the Employers may reasonably determine should be withheld
        pursuant to any applicable law or regulation.

      

      9.           Assignability.  The
        Employers may assign this Agreement and its rights and obligations hereunder
        in
        whole, but not in part, to any corporation, bank or other entity with or
        into
        which the Employers may hereafter merge or consolidate or to which the Employers
        may transfer all or substantially all of its assets, if in any such case
        said
        corporation, bank or other entity shall by operation of law or expressly
        in
        writing assume all obligations of the Employers hereunder as fully as if
        it had
        been originally made a party hereto, but may not otherwise assign this Agreement
        or its rights and obligations hereunder.  The Executive may not assign
        or transfer this Agreement or any rights or obligations hereunder.

      

      10.           Notice.  For
        the purposes of this Agreement, notices and all other communications provided
        for in this Agreement shall be in writing and shall be deemed to have been
        duly
        given when delivered or mailed by certified or registered mail, return receipt
        requested, postage prepaid, addressed to the respective addresses set forth
        below:

      

      
        	
                 

              	
                To
                  the Employers:

              	
                Board
                  of Directors

              
	 	
                First
                  Federal Bancshares of Arkansas, Inc.

              
	 	
                Harrison,
                  Arkansas 72601

              
	 	
                1401
                  Highway 62-65 North

              
	 	 
	
                 

              	
                To
                  the Executive:

              	
                Larry
                  J. Brandt

              
	 	
                At
                  his last address on file with the
                  Employers

              

      

      

      11.           Amendment;
        Waiver.  No provisions of this Agreement may be modified,
        waived or discharged unless such waiver, modification or discharge is agreed
        to
        in writing and signed by the Executive and such officer or officers as may
        be
        specifically designated by the Boards of Directors of the Employers to sign
        on
        their behalf.  No waiver by any party hereto at any time of any breach
        by any other party hereto of, or compliance with, any condition or provision
        of
        this Agreement to be performed by such other party shall be deemed a waiver
        of
        similar or dissimilar provisions or conditions at the same or at any prior
        or
        subsequent time.  In addition, notwithstanding anything in this
        Agreement to the contrary, the Employers may amend in good faith any terms
        of
        this Agreement, including retroactively, in order to comply with Section
        409A of
        the Code.

       

      12.           Governing
        Law.  The validity, interpretation, construction and
        performance of this Agreement shall be governed by the laws of the United
        States
        where applicable and otherwise by the substantive laws of the State of
        Arkansas.

       

      
 

      
        
          
          

        

        
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      13.           Nature
        of Obligations.  Nothing contained herein shall create or
        require the Employers to create a trust of any kind to fund any benefits
        which
        may be payable hereunder, and to the extent that the Executive acquires a
        right
        to receive benefits from the Employers hereunder, such right shall be no
        greater
        than the right of any unsecured general creditor of the Employers.

      

      14.           Interpretation
        and Headings.  This agreement shall be interpreted in order
        to achieve the purposes for which it was entered into.  The section
        headings contained in this Agreement are for reference purposes only and
        shall
        not affect in any way the meaning or interpretation of this
        Agreement.

      

      15.           Validity.  The
        invalidity or unenforceability of any provision of this Agreement shall not
        affect the validity or enforceability of any other provisions of this Agreement,
        which shall remain in full force and effect.

      

      16.           Changes
        in Statutes or Regulations.  If any statutory or regulation
        provision referenced herein is subsequently changed or re-numbered, or is
        replaced by a separate provision, then the references in this Agreement to
        such
        statutory or regulatory provision shall be deemed to be a reference to such
        section as amended, re-numbered or replaced.

      

      17.           Counterparts.  This
        Agreement may be executed in one or more counterparts, each of which shall
        be
        deemed to be an original but all of which together will constitute one and
        the
        same instrument.

      

      18.           Regulatory
        Actions.  The following provisions shall be applicable to the
        parties to the extent that they are required to be included in employment
        agreements between a savings association and its employees pursuant to Section
        563.39(b) of the Regulations Applicable to all Savings Banks, 12 C.F.R.
§563.39(b), or any successor thereto, and shall be controlling in the event
        of a
        conflict with any other provision of this Agreement, including without
        limitation Section 5 hereof.

      

      (a)           If
        Executive is suspended from office and/or temporarily prohibited from
        participating in the conduct of the Employers’ affairs by a notice served under
        Section 8(e)(3) or Section 8(g)(1) of the Federal Deposit Insurance Act (“FDIA”)
        (12 U.S.C. §§1818(e)(3) and 1818(g)(1)), the Employers’ obligations under this
        Agreement shall be suspended as of the date of service, unless stayed by
        appropriate proceedings.  If the charges in the notice are dismissed,
        the Employers may, in their discretion:  (i) pay the Executive all or
        part of the compensation withheld while its obligations under this Agreement
        were suspended, and (ii) reinstate (in whole or in part) any of its obligations
        which were suspended.

      

      (b)           If
        the Executive is removed from office and/or permanently prohibited from
        participating in the conduct of the Employers’ affairs by an order issued under
        Section 8(e)(4) or Section 8(g)(1) of the FDIA (12 U.S.C. §§1818(e)(4) and
        (g)(1)), all obligations of the Employers under this Agreement shall terminate
        as of the effective date of the order, but vested rights of the Executive
        and
        the Employers as of the date of termination shall not be affected.

       

      
 

      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

      

      (c)           If
        the Bank is in default, as defined in Section 3(x)(1) of the FDIA (12 U.S.C.
        §1813(x)(1)), all obligations under this Agreement shall terminate as of the
        date of default, but vested rights of the Executive and the Employers as
        of the
        date of termination shall not be affected.

      

      (d)           All
        obligations under this Agreement shall be terminated pursuant to 12 C.F.R.
        §563.39(b)(5), except to the extent that it is determined that continuation
        of
        the Agreement for the continued operation of the Employers is necessary:
        (i) by
        the Director of the Office of Thrift Supervision (“OTS”), or his or her
        designee, at the time the Federal Deposit Insurance Corporation (“FDIC”) enters
        into an agreement to provide assistance to or on behalf of the Bank under
        the
        authority contained in Section 13(c) of the FDIA (12 U.S.C. §1823(c)); or (ii)
        by the Director of the OTS, or his or her designee, at the time the Director
        or
        his or her designee approves a supervisory merger to resolve problems related
        to
        operation of the Bank or when the Bank is determined by the Director of the
        OTS
        to be in an unsafe or unsound condition, but vested rights of the Executive
        and
        the Employers as of the date of termination shall not be affected.

      

      19.           Regulatory
        Prohibition.  Notwithstanding any other provision of this
        Agreement to the contrary, any payments made to the Executive pursuant to
        this
        Agreement, or otherwise, are subject to and conditioned upon their compliance
        with Section 18(k) of the FDIA (12 U.S.C. §1828(k)) and any regulations
        promulgated thereunder, including 12 C.F.R. Part 359.

      

      20.           Entire
        Agreement.  This Agreement embodies the entire agreement
        between the Employers and the Executive with respect to the matters agreed
        to
        herein.  All prior agreements between the Employers and the Executive
        with respect to the matters agreed to herein are hereby superseded and shall
        have no force or effect, including the Prior Agreement.

       

      
 

      
        
          
          

        

        
          10

          
            

          

        

        
          
          

        

      

      IN
        WITNESS WHEREOF, this Agreement has
        been executed as of the date first above written.

      

      
        	
                Attest:

              	
                FIRST
                  FEDERAL BANCSHARES OF ARKANSAS, INC.

              
	 	 
	 	 
	/s/
                Tommy W. Richardson 	 	
                By:

              	/s/
                John P. Hammerschmidt 
	Tommy
                W. Richardson	 	
                John
                  P. Hammerschmidt

              
	 	 
	
                Attest:

              	
                FIRST
                  FEDERAL BANK

              
	 	 
	 	 
	/s/
                Tommy W. Richardson 	 	
                By:

              	/s/
                John P. Hammerschmidt 
	Tommy
                W. Richardson 	 	
                John
                  P. Hammerschmidt

              
	 	 
	 	
                EXECUTIVE

              
	 	 
	 	 
	 	
                By:

              	/s/
                Larry J. Brandt 
	 	 	
                Larry
                  J. Brandt

              

      

      

      
        
          
          

        

        
          11exh102.htm

     

    
      

      

    

    Exhibit
      10.2

     

    
      AMENDED
        AND RESTATED EMPLOYMENT AGREEMENT

      

      

      THIS
        AMENDED AND RESTATED EMPLOYMENT
        AGREEMENT, dated this 14th day of
        December
        2007, between First Federal Bancshares of Arkansas, Inc., a Texas chartered
        corporation (the "Corporation"), First Federal Bank, a federally chartered
        savings bank and a wholly owned subsidiary of the Corporation (the "Bank"),
        and
        Tommy W. Richardson (the "Executive").

      

      WITNESSETH

      

      WHEREAS,
        the Bank was previously known
        as First Federal Bank of Arkansas, F.A.;

      

      WHEREAS,
        the Executive is currently
        employed as the Executive Vice President and Chief Operating Officer of the
        Corporation and as President and Chief Operating Officer of the Bank, and
        the
        Corporation, the Bank and the Executive have previously entered into an
        employment agreement dated April 25, 2002, as amended on January 24, 2006
        (the
“Prior Agreement”);

      

      WHEREAS,
        the Corporation and the Bank
        (together the “Employers”) desire to amend and restate the Prior Agreement in
        order to make changes to comply with Section 409A of the Internal Revenue
        Code
        of 1986, as amended (the “Code”), as well as certain other changes;

      

      WHEREAS,
        the Employers desire to be
        ensured of the Executive's continued active participation in the business
        of the
        Employers; and

      

      WHEREAS,
        in order to induce the
        Executive to remain in the employ of the Employers and in consideration of
        the
        Executive's agreeing to remain in the employ of the Employers, the parties
        desire to specify the severance benefits which shall be due the Executive
        in the
        event that his employment with the Employers is terminated under specified
        circumstances;

      

      NOW
        THEREFORE, in consideration of the
        premises and the mutual agreements herein contained, the parties hereby agree
        as
        follows:

      

      1.           
        Definitions.  The following words and terms shall
        have the meanings set forth below for the purposes of this
        Agreement:

      

      (a)           Average
        Annual Compensation.  The Executive's "Average Annual
        Compensation" for purposes of this Agreement shall be deemed to mean the
        average
        level of compensation paid to the Executive by the Employers or any subsidiary
        thereof during the most recent five taxable years preceding the year in which
        the Date of Termination occurs (or such shorter period as the Executive was
        employed), and which was included in the Executive’s gross income for tax
        purposes, including but not limited to Base Salary, bonuses, board fees, if
        applicable, and all other amounts taxable to the Executive pursuant to any
        employee benefit plans of the Employers.

      

      (b)           Base
        Salary.  "Base Salary" shall have the meaning set forth in
        Section 3(a) hereof.

       

      
 

      
        
          
          

        

        
          1

          
            

          

        

        
          
          

        

      

      (c)           Cause.
        Termination of the Executive's employment for "Cause" shall mean termination
        because of personal dishonesty, incompetence, willful misconduct, breach
        of
        fiduciary duty involving personal profit, intentional failure to perform
        stated
        duties, willful violation of any law, rule or regulation (other than traffic
        violations or similar offenses) or final cease-and-desist order or material
        breach of any provision of this Agreement.  For purposes of this
        paragraph, no act or failure to act on the Executive's part shall be considered
        "willful" unless done, or omitted to be done, by the Executive not in good
        faith
        and without reasonable belief that the Executive's action or omission was
        in the
        best interest of the Employers.

      

      (d)           Change
        in Control.  "Change in Control" shall mean a change in the
        ownership of the Corporation or the Bank, a change in the effective control
        of
        the Corporation or the Bank or a change in the ownership of a substantial
        portion of the assets of the Corporation or the Bank, in each case as provided
        under Section 409A of the Code and the regulations thereunder.

      

      (e)           Date
        of Termination.  "Date of Termination" shall mean (i) if the
        Executive's employment is terminated for Cause, the date on which the Notice
        of
        Termination is given, (ii) if the Executive’s employment is terminated due to
        death, the date of death, and (iii) if the Executive's employment is terminated
        for any other reason, the date specified in such Notice of
        Termination.

      

      (f)           Disability.  “Disability”
        shall mean the Executive (i) is unable to engage in any substantial gainful
        activity by reason of any medically determinable physical or mental impairment
        which can be expected to result in death or can be expected to last for a
        continuous period of not less than 12 months, or (ii) is, by reason of any
        medically determinable physical or mental impairment which can be expected
        to
        result in death or can be expected to last for a continuous period of not
        less
        than 12 months, receiving income replacement benefits for a period of not
        less
        than three months under an accident and health plan covering employees of
        the
        Employers.

      

      (g)           Effective
        Date.  The Effective Date of this Agreement shall mean the
        date first written above.

      

      (h)           Good
        Reason.  Termination by the Executive of the Executive's
        employment for "Good Reason" shall mean termination by the Executive based
        on
        the occurrence of any of the following events:

      

      (i)
        any
        material breach of this Agreement by the Employers, including without limitation
        any of the following: (A) a material diminution in the Executive’s base
        compensation, (B) a material diminution in the Executive’s authority, duties or
        responsibilities as prescribed in Section 2, or (C) a material diminution
        in the
        authority, duties or responsibilities of the officer to whom the Executive
        is
        required to report; or

      

      (ii)
        any
        material change in the geographic location at which the Executive must perform
        his services under this Agreement;

       

      
 

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

      provided,
        however, that prior to any termination of employment for Good Reason, the
        Executive must first provide written notice to the Employers within ninety
        (90)
        days of the initial existence of the condition, describing the existence
        of such
        condition, and the Employers shall thereafter have the right to remedy the
        condition within thirty (30) days of the date the Employers received the
        written
        notice from the Executive.  If the Employers remedy the condition
        within such thirty (30) day cure period, then no Good Reason shall be deemed
        to
        exist with respect to such condition.  If the Employers do not remedy
        the condition within such thirty (30) day cure period, then the Executive
        may
        deliver a Notice of Termination for Good Reason at any time within sixty
        (60)
        days following the expiration of such cure period.

      

      (i)           IRS.  IRS
        shall mean the Internal Revenue Service.

      

      (j)           Notice
        of Termination.  Any purported termination of the Executive's
        employment by the Employers for any reason, including without limitation
        for
        Cause, Disability or Retirement, or by the Executive for any reason, including
        without limitation for Good Reason, shall be communicated by a written "Notice
        of Termination" to the other party hereto.  For purposes of this
        Agreement, a "Notice of Termination" shall mean a dated notice which (i)
        indicates the specific termination provision in this Agreement relied upon,
        (ii)
        sets forth in reasonable detail the facts and circumstances claimed to provide
        a
        basis for termination of the Executive's employment under the provision so
        indicated, (iii) specifies a Date of Termination, which shall be not less
        than
        thirty (30) nor more than ninety (90) days after such Notice of Termination
        is
        given, except in the case of the Employers' termination of Executive's
        employment for Cause; and (iv) is given in the manner specified in Section
        10
        hereof.

      

      (k)           Retirement.  "Retirement"
        shall mean voluntary termination by the Executive in accordance with the
        Employers' retirement policies, including early retirement, generally applicable
        to the Employers' salaried employees.

      

      2.           Term
        of Employment.

      

      (a)           The
        Employers hereby employ the Executive as Executive Vice President and Chief
        Operating Officer of the Corporation and as President and Chief Operating
        Officer of the Bank and the Executive hereby accepts said employment and
        agrees
        to render such services to the Employers on the terms and conditions set
        forth
        in this Agreement. Unless extended as provided in this Section 2, this Agreement
        shall terminate three (3) years after December 14, 2007 (the "Commencement
        Date").  Prior to the first annual anniversary of the Commencement
        Date and each annual anniversary thereafter, the Boards of Directors of the
        Employers shall consider, review (with appropriate corporate documentation
        thereof, and after taking into account all relevant factors, including the
        Executive's performance) and, if appropriate, explicitly approve a one-year
        extension of the remaining term of this Agreement.  The term of this
        Agreement shall continue to extend each year if the Boards of Directors so
        approve such extension unless the Executive gives written notice to the
        Employers of the Executive's election not to extend the term, with such notice
        to be given not less than thirty (30) days prior to any such anniversary
        date.  If the Boards of Directors elect not to extend the term, they
        shall give written notice of such decision to the Executive not less than
        thirty
        (30) days prior to any such anniversary date.  If any party gives
        timely notice that the term will not be extended as of any annual anniversary
        date, then this Agreement shall terminate at the conclusion of its remaining
        term.  References herein to the term of this Agreement shall refer
        both to the initial term and successive terms.

       

      
 

      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

      (b)           During
        the term of this Agreement, the Executive shall perform such executive services
        for the Employers as are consistent with his title of Executive Vice President
        and Chief Operating Officer of the Corporation and as President and Chief
        Operating Officer of the Bank.

      

      3.           
        Compensation and Benefits.

      

      (a)           The
        Employers shall compensate and pay Executive for his services during the
        term of
        this Agreement at a minimum base salary of $217,000 per year ("Base Salary"),
        which may be increased from time to time in such amounts as may be determined
        by
        the Boards of Directors of the Employers.  In addition to his Base
        Salary, the Executive shall be entitled to receive during the term of this
        Agreement such bonus payments as may be determined by the Boards of Directors
        of
        the Employers.

      

      (b)           During
        the term of the Agreement, Executive shall be entitled to participate in
        and
        receive the benefits of any pension or other retirement benefit plan, profit
        sharing, stock option, employee stock ownership, or other plans, benefits
        and
        privileges given to employees and executives of the Employers, to the extent
        commensurate with his then duties and responsibilities, as fixed by the Boards
        of Directors of the Employers.  The Employers shall not make any
        changes in such plans, benefits or privileges which would adversely affect
        Executive's rights or benefits thereunder, unless such change occurs pursuant
        to
        a program applicable to all executive officers of the Employers and does
        not
        result in a proportionately greater adverse change in the rights of or benefits
        to Executive as compared with any other executive officer of the
        Employers.  Nothing paid to Executive under any plan or arrangement
        presently in effect or made available in the future shall be deemed to be
        in
        lieu of the salary payable to the Executive pursuant to Section 3(a)
        hereof.

      

      (c)           During
        the term of this Agreement, the Executive shall be entitled to paid annual
        vacation in accordance with the policies as established from time to time
        by the
        Boards of Directors of the Employers.  The Executive shall not be
        entitled to receive any additional compensation from the Employers for failure
        to take a vacation, nor shall the Executive be able to accumulate unused
        vacation time from one year to the next, except to the extent authorized
        by the
        Boards of Directors of the Employers.

      

      (d)           During
        the term of this Agreement, in keeping with past practices, the Employers
        shall
        continue to provide the Executive with the automobile he presently drives.
        The
        Employers shall be responsible and shall pay for all costs of insurance
        coverage, repairs, maintenance and other incidental expenses, including license,
        fuel and oil.  If such costs or expenses are initially paid by the
        Executive, the Employers shall reimburse the Executive therefor.  Such
        reimbursement shall be paid promptly by the Employers and in any event no
        later
        than March 15 of the year immediately following the year in which such expenses
        were incurred.  The Employers shall provide the Executive with a
        replacement automobile of a similar type as selected by the Executive at
        approximately the time that his present automobile reaches three (3) years
        of
        age and approximately every three (3) years thereafter, upon the same terms
        and
        conditions.

       

      
 

      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

      (e)           During
        the term of this Agreement, in keeping with past practices, the Employers
        shall
        continue to pay the annual membership dues at the country clubs at which
        the
        Executive is currently a member.  If such dues are initially paid by
        the Executive, the Employers shall reimburse the Executive
        therefor.  Such reimbursement shall be paid promptly by the Employers
        and in any event no later than March 15 of the year immediately following
        the
        year in which such dues were paid.

      

      (f)           The
        Employers shall provide continued medical insurance in the Employers' health
        plan for the benefit of the Executive and his spouse for a period of five
        years
        from the date of the Executive’s Retirement, and such insurance shall be
        comparable to that which is provided in this Agreement and regardless of
        whether
        the Executive is eligible to participate in the Employers' health
        plan.  In the event of the Executive's death before the expiration of
        such five year period, the Employers shall provide the Executive's spouse
        continued medical insurance in the Employers' health plan comparable to that
        which is being provided to the Executive's spouse at such time for the remainder
        of such five year period.  Any insurance premiums payable by the
        Employers or any successors pursuant to this Section 3(f) shall be payable
        at
        such times and in such amounts as if the Executive was still an employee
        of the
        Employers, subject to any increases in such amounts imposed by the insurance
        company or COBRA, and the amount of insurance premiums required to be paid
        by
        the Employers in any taxable year shall not affect the amount of insurance
        premiums required to be paid by the Employers in any other taxable year;
        and
        provided further that if the Executive’s participation in any group insurance
        plan is barred, the Employers shall either arrange to provide the Executive
        with
        insurance benefits substantially similar to those which the Executive was
        entitled to receive under such group insurance plan or, if such coverage
        cannot
        be obtained, pay a lump sum cash equivalency amount within thirty (30) days
        following the Date of Termination based on the annualized rate of premiums
        being
        paid by the Employers as of the Date of Termination.  This Section
        3(f) shall not apply if the Executive is or becomes employed full-time by
        an
        employer other than the Corporation or the Bank.

      

      (g)           In
        the event of the Executive's death during the term of this Agreement, the
        Executive's spouse, estate, legal representative or named beneficiaries (as
        directed by the Executive in writing) shall be paid on a monthly basis the
        Executive's Base Salary (as defined in Section 3(a) hereof) in effect at
        the
        time of the Executive's death for a period of twelve (12) months from the
        date
        of the Executive's death.

      

      (h)           The
        Executive's compensation and expenses shall be paid by the Corporation and
        the
        Bank in the same proportion as the time and services actually expended by
        the
        Executive on behalf of each respective Employer.

      

      4.           Expenses.  The
        Employers shall reimburse Executive or otherwise provide for or pay for all
        reasonable expenses incurred by Executive in furtherance of, or in connection
        with the business of the Employers, including, but not by way of limitation,
        automobile and traveling expenses, and all reasonable entertainment expenses
        (whether incurred at the Executive's residence, while traveling or otherwise),
        subject to such reasonable documentation and other limitations as may be
        established by the Boards of Directors of the Employers.  If such
        expenses are paid in the first instance by Executive, the Employers shall
        reimburse the Executive therefor.  Such reimbursement shall be paid
        promptly by the Employers and in any event no later than March 15 of the
        year
        immediately following the year in which such expenses were
        incurred.

       

      
 

      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      

      5.           
        Termination.

      

      (a)           The
        Employers shall have the right, at any time upon prior Notice of Termination,
        to
        terminate the Executive's employment hereunder for any reason, including
        without
        limitation termination for Cause, Disability or Retirement, and the Executive
        shall have the right, upon prior Notice of Termination, to terminate his
        employment hereunder for any reason.

      

      (b)           In
        the event that (i) Executive's employment is terminated by the Employers
        for
        Cause, or (ii) the Executive terminates his employment hereunder other than
        for
        Good Reason, the Executive shall have no right pursuant to this Agreement
        to
        compensation or other benefits for any period after the applicable Date of
        Termination.  In the event that the Executive's employment is
        terminated due to Disability or Retirement, the Executive's rights shall
        be as
        provided in Section 3(f) hereof.  In the event the Executive's
        employment is terminated due to the Executive's death, the Executive's rights
        shall be as provided in Section 3(g) hereof.

      

      (c)           In
        the event that (i) the Executive's employment is terminated by the Employers
        for
        other than Cause, Disability, Retirement or the Executive's death or (ii)
        such
        employment is terminated by the Executive for Good Reason, then the Employers
        shall, subject to the provisions of Section 6 hereof, if
        applicable,

      

      (A)           pay
        to the Executive, in a lump sum within ten (10) business days following the
        Date
        of Termination, a cash severance amount equal to three (3) times the Executive's
        Average Annual Compensation, and

      

      (B)           maintain
        and provide for a period ending at the earlier of (i) the expiration of the
        remaining term of employment pursuant hereto prior to giving effect to the
        Notice of Termination or (ii) the date of the Executive's full-time employment
        by another employer (provided that the Executive is entitled under the terms
        of
        such employment to benefits substantially similar to those described in this
        subparagraph (B)), at no cost to the Executive, the Executive's continued
        participation in all group insurance, life insurance, health and accident
        insurance, and disability insurance in which the Executive was participating
        immediately prior to the Date of Termination; provided that any insurance
        premiums payable by the Employers or any successors pursuant to this Section
        5(c)(B) shall be payable at such times and in such amounts as if the Executive
        was still an employee of the Employers, subject to any increases in such
        amounts
        imposed by the insurance company or COBRA, and the amount of insurance premiums
        required to be paid by the Employers in any taxable year shall not affect
        the
        amount of insurance premiums required to be paid by the Employers in any
        other
        taxable year; and provided further that if the Executive’s participation in any
        group insurance plan is barred, the Employers shall either arrange to provide
        the Executive with insurance benefits substantially similar to those which
        the
        Executive was entitled to receive under such group insurance plan or, if
        such
        coverage cannot be obtained, pay a lump sum cash equivalency amount within
        thirty (30) days following the Date of Termination based on the annualized
        rate
        of premiums being paid by the Employers as of the Date of Termination;
        and

       

      
 

      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

      

      (C)           pay
        to the Executive, in a lump sum within thirty (30) days following the Date
        of
        Termination, a cash amount equal to the projected cost to the Employers of
        providing benefits to the Executive for the remaining term of employment
        under
        this Agreement (prior to giving effect to the Notice of Termination) pursuant
        to
        any other employee benefit plans, program or arrangements offered by the
        Employers in which the Executive was entitled to participate immediately
        prior
        to the Date of Termination (excluding (y) stock option plans, restricted
        stock
        plans and employee stock ownership plans of the Employers and (z) bonuses
        and
        other items of cash compensation), with the projected cost to the Employers
        to
        be based on the costs incurred for the calendar year immediately preceding
        the
        year in which the Date of Termination occurs and with any automobile-related
        costs to exclude any depreciation on Bank-owned automobiles.

      

      6.           Limitation
        of Benefits under Certain Circumstances.  If the payments and
        benefits pursuant to Section 5 hereof, either alone or together with other
        payments and benefits which the Executive has the right to receive from the
        Employers, would constitute a "parachute payment" under Section 280G of the
        Code, then the payments and benefits pursuant to Section 5 hereof shall be
        reduced by the minimum amount necessary to result in no portion of the payments
        and benefits under Section 5 being non-deductible to either of the Employers
        pursuant to Section 280G of the Code and subject to the excise tax imposed
        under
        Section 4999 of the Code.  If the payments and benefits under Section
        5 are required to be reduced, the cash severance shall be reduced first,
        followed by a reduction in the fringe benefits.  The determination of
        any reduction in the payments and benefits to be made pursuant to Section
        5
        shall be based upon the opinion of independent tax counsel selected by the
        Employers and paid by the Employers.  Such counsel shall promptly
        prepare the foregoing opinion, but in no event later than thirty (30) days
        from
        the Date of Termination, and may use such actuaries as such counsel deems
        necessary or advisable for the purpose.  Nothing contained in this
        Section 6 shall result in a reduction of any payments or benefits to which
        the
        Executive may be entitled upon termination of employment under any circumstances
        other than as specified in this Section 6, or a reduction in the payments
        and
        benefits specified in Section 5 below zero.

      

      7.           Mitigation;
        Exclusivity of Benefits.

      

      (a)           The
        Executive shall not be required to mitigate the amount of any benefits hereunder
        by seeking other employment or otherwise, nor shall the amount of any such
        benefits be reduced by any compensation earned by the Executive as a result
        of
        employment by another employer after the Date of Termination or otherwise,
        except as set forth in Sections 3(f) and 5(c)(B)(ii) hereof.

      

      (b)           The
        specific arrangements referred to herein are not intended to exclude any
        other
        benefits which may be available to the Executive upon a termination of
        employment with the Employers pursuant to employee benefit plans of the
        Employers or otherwise.

      

      8.           Withholding.  All
        payments required to be made by the Employers hereunder to the Executive
        shall
        be subject to the withholding of such amounts, if any, relating to tax and
        other
        payroll deductions as the Employers may reasonably determine should be withheld
        pursuant to any applicable law or regulation.

       

      
 

      
        
          
          

        

        
          7

          
            

          

        

        
          
          

        

      

      9.           Assignability.  The
        Employers may assign this Agreement and its rights and obligations hereunder
        in
        whole, but not in part, to any corporation, bank or other entity with or
        into
        which the Employers may hereafter merge or consolidate or to which the Employers
        may transfer all or substantially all of its assets, if in any such case
        said
        corporation, bank or other entity shall by operation of law or expressly
        in
        writing assume all obligations of the Employers hereunder as fully as if
        it had
        been originally made a party hereto, but may not otherwise assign this Agreement
        or its rights and obligations hereunder.  The Executive may not assign
        or transfer this Agreement or any rights or obligations hereunder.

      

      10.           Notice.  For
        the purposes of this Agreement, notices and all other communications provided
        for in this Agreement shall be in writing and shall be deemed to have been
        duly
        given when delivered or mailed by certified or registered mail, return receipt
        requested, postage prepaid, addressed to the respective addresses set forth
        below:

       

      
        
          	
                   

                	
                  To
                    the Employers:

                	
                  Board
                    of Directors

                
	 	
                  First
                    Federal Bancshares of Arkansas, Inc.

                
	 	
                  
                    1401
                      Highway 62-65 North

                  

                
	 	
                  
                    Harrison,
                      Arkansas 72601

                  

                
	 	
                   

                
	
                   

                	
                  To
                    the Executive:

                	
                  Tommy
                    Richardson

                
	 	
                  At
                    his last address on file with the
                    Employers

                

        

      

       

      11.           Amendment;
        Waiver.  No provisions of this Agreement may be modified,
        waived or discharged unless such waiver, modification or discharge is agreed
        to
        in writing signed by the Executive and such officer or officers as may be
        specifically designated by the Boards of Directors of the Employers to sign
        on
        their behalf.  No waiver by any party hereto at any time of any breach
        by any other party hereto of, or compliance with, any condition or provision
        of
        this Agreement to be performed by such other party shall be deemed a waiver
        of
        similar or dissimilar provisions or conditions at the same or at any prior
        or
        subsequent time.  In addition, notwithstanding anything in this
        Agreement to the contrary, the Employers may amend in good faith any terms
        of
        this Agreement, including retroactively, in order to comply with Section
        409A of
        the Code.

      

      12.           Governing
        Law.  The validity, interpretation, construction and
        performance of this Agreement shall be governed by the laws of the United
        States
        where applicable and otherwise by the substantive laws of the State of
        Arkansas.

      

      13.           Nature
        of Obligations.  Nothing contained herein shall create or
        require the Employers to create a trust of any kind to fund any benefits
        which
        may be payable hereunder, and to the extent that the Executive acquires a
        right
        to receive benefits from the Employers hereunder, such right shall be no
        greater
        than the right of any unsecured general creditor of the Employers.

      

      14.           Interpretation
        and Headings.  This agreement shall be interpreted in order
        to achieve the purposes for which it was entered into.  The section
        headings contained in this Agreement are for reference purposes only and
        shall
        not affect in any way the meaning or interpretation of this
        Agreement.

       

      
 

      
        
          
          

        

        
          8

          
            

          

        

        
          
          

        

      

      15.           Validity.  The
        invalidity or unenforceability of any provision of this Agreement shall not
        affect the validity or enforceability of any other provisions of this Agreement,
        which shall remain in full force and effect.

      

      16.           Changes
        in Statutes or Regulations. If any statutory or regulation provision
        referenced herein is subsequently changed or re-numbered, or is replaced
        by a
        separate provision, then the references in this Agreement to such statutory
        or
        regulatory provision shall be deemed to be a reference to such section as
        amended, re-numbered or replaced.

      

      17.           Counterparts.  This
        Agreement may be executed in one or more counterparts, each of which shall
        be
        deemed to be an original but all of which together will constitute one and
        the
        same instrument.

      

      18.           Regulatory
        Actions.  The following provisions shall be applicable to the
        parties to the extent that they are required to be included in employment
        agreements between a savings association and its employees pursuant to Section
        563.39(b) of the Regulations Applicable to all Savings Banks, 12 C.F.R. §
563.39(b), or any successor thereto, and shall be controlling in the event
        of a
        conflict with any other provision of this Agreement, including without
        limitation Section 5 hereof.

      

      (a)           If
        Executive is suspended from office and/or temporarily prohibited from
        participating in the conduct of the Employers' affairs by a notice served
        under
        Section 8(e)(3) or Section 8(g)(1) of the Federal Deposit Insurance Act ("FDIA")
        (12 U.S.C. §§1818(e)(3) and 1818(g)(1)), the Employers' obligations under this
        Agreement shall be suspended as of the date of service, unless stayed by
        appropriate proceedings.  If the charges in the notice are dismissed,
        the Employers may, in their discretion:  (i) pay the Executive all or
        part of the compensation withheld while its obligations under this Agreement
        were suspended, and (ii) reinstate (in whole or in part) any of its obligations
        which were suspended.

      

      (b)           If
        the Executive is removed from office and/or permanently prohibited from
        participating in the conduct of the Employers' affairs by an order issued
        under
        Section 8(e)(4) or Section 8(g)(1) of the FDIA (12 U.S.C. §§1818(e)(4) and
        (g)(1)), all obligations of the Employers under this Agreement shall terminate
        as of the effective date of the order, but vested rights of the Executive
        and
        the Employers as of the date of termination shall not be affected.

      

      (c)           If
        the Bank is in default, as defined in Section 3(x)(1) of the FDIA (12 U.S.C.
        §1813(x)(1)), all obligations under this Agreement shall terminate as of the
        date of default, but vested rights of the Executive and the Employers as
        of the
        date of termination shall not be affected.

      

      (d)           All
        obligations under this Agreement shall be terminated pursuant to 12 C.F.R.
        §563.39(b)(5), except to the extent that it is determined that continuation
        of
        the Agreement for the continued operation of the Employers is necessary:
        (i) by
        the Director of the Office of Thrift Supervision ("OTS"), or his or her
        designee, at the time the Federal Deposit Insurance Corporation ("FDIC")
        enters
        into an agreement to provide assistance to or on behalf of the Bank under
        the
        authority contained in Section 13(c) of the FDIA (12 U.S.C. §1823(c)); or (ii)
        by the Director of the OTS, or his or her designee, at the time the Director
        or
        his or her designee approves a supervisory merger to resolve problems related
        to
        operation of the Bank or when the Bank is determined by the Director of the
        OTS
        to be in an unsafe or unsound condition, but vested rights of the Executive
        and
        the Employers as of the date of termination shall not be affected.

       

      
 

      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

      

      19.           Regulatory
        Prohibition.  Notwithstanding any other provision of this
        Agreement to the contrary, any payments made to the Executive pursuant to
        this
        Agreement, or otherwise, are subject to and conditioned upon their compliance
        with Section 18(k) of the FDIA (12 U.S.C. §1828(k)) and any regulations
        promulgated thereunder, including 12 C.F.R. Part 359.

      

      20.           Entire
        Agreement.  This Agreement embodies the entire agreement
        between the Employers and the Executive with respect to the matters agreed
        to
        herein.  All prior agreements between the Employers and the Executive
        with respect to the matters agreed to herein are hereby superseded and shall
        have no force or effect, including the Prior Agreement.

      

      

      
        
          
          

        

        
          10

          
            

          

        

        
          
          

        

      

      IN
        WITNESS WHEREOF, this Agreement has
        been executed as of the date first above written.

      

      
        
          	
                  Attest:

                	
                  FIRST
                    FEDERAL BANCSHARES OF ARKANSAS, INC.

                
	 	 
	 	 
	/s/
                  Tommy W. Richardson 	 	
                  By:

                	/s/
                  Larry J. Brandt 
	Tommy
                  W. Richardson 	 	
                  Larry
                    J. Brandt, President and Chief Executive Officer

                
	 	 
	
                  Attest: 

                	
                  FIRST
                    FEDERAL BANK

                
	 	 
	 	 
	/s/ Tommy
                  W. Richardson 	 	
                  By:

                	/s/
                  Larry J. Brandt 
	Tommy
                  W. Richardson 	 	
                  Larry
                    J. Brandt, Chief Executive Officer

                
	 	 
	 	
                  EXECUTIVE

                
	 	 
	 	 
	 	
                  By:

                	/s/
                  Tommy W. Richardson 
	 	 	
                  Tommy
                    W. Richardson

                

        

      

      

      

      

      

      

      
        
          
          

        

        
          11

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