EXHIBIT 10.1

RETENTION AGREEMENT

THIS RETENTION AGREEMENT (the "Agreement") is entered into with LAKE SHORE
SAVINGS BANK, a federally-chartered savings bank having an office at 31 East
Fourth Street, Dunkirk, New York 14048 (the "Bank"), and Jeffrey M. Werdein (the
"Executive") effective as of March 29, 2018 (the "Effective Date").

WHEREAS, Executive currently serves as Executive Vice President, Commercial
Division of Lake Shore Bancorp, Inc. (the "Company") and the Bank, and
WHEREAS, Executive is a member of senior management and has contributed
significantly to the success of the Bank, and the Executive's continued services
are vital to the Bank's continued growth and success; and
WHEREAS, the Bank desires to provide further incentive to Executive to remain in
the employ of the Bank.
NOW, THEREFORE, in consideration of the mutual covenants and promises in this
Agreement, the sufficiency of which is hereby acknowledged, the parties agree as
follows:

ARTICLE 1
DEFINITIONS
For purposes of this Agreement, the following terms shall have the meanings set
forth below:
1.1 "Account" means an account which shall be utilized solely as a device for
the determination and measurement of the amounts to be paid to Executive
pursuant to this Agreement.  Executive's account shall not constitute or be
treated as a trust fund of any kind.
1.2 "Board" means the Board of Directors of the Bank either acting as a full
Board or through its Compensation Committee.
1.3 "Cause" means 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 any
material breach of this Agreement.  A termination of employment due to Cause
shall be effected by notice of termination given to the Executive by the Bank
and shall take effect on the later of the effective Date of Termination
specified in such notice or the date on which the notice of termination is
deemed given to the Executive.
1.4 "Change in Control" means a change in the ownership or effective control of
the Employer, or in the ownership of a substantial portion of the assets of the
Employer, as such change is defined in Code Section 409A and regulations
thereunder.  Notwithstanding anything in this Agreement to the contrary, in no
event shall a reorganization of Lake Shore, MHC, the Company or Bank solely
within its corporate structure, including a second-step conversion from mutual
to stock form of Lake Shore, MHC, constitute a "Change in Control" for purposes
of this Agreement.

--------------------------------------------------------------------------------

1.5 "Code" means the Internal Revenue Code of 1986, as amended.
1.6 "Date of Termination" means Executive's date of "Separation from Service."
1.7 "Disability" means a condition of the Executive whereby the Executive
either: (i) is unable to engage in any substantial gainful activity by reason of
any medically determinable physical or mental impairment that 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 that 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 Employer.  The Board will
determine whether the Executive has incurred a Disability based on its own good
faith determination and may require the Executive to submit to reasonable
physical and mental examinations for this purpose.  The Executive will also be
deemed to have incurred a Disability if determined to be totally disabled by the
Social Security Administration or in accordance with a disability insurance
program, provided that the definition of disability applied under such
disability insurance program complies with the initial sentence of this section.
1.8 "Good Reason" shall constitute any of the following circumstances:
(a) the failure of the Bank (whether by act or omission of the Board of
Directors, or otherwise) to appoint or re-appoint or elect or re-elect the
Executive to the position with Bank that he held immediately prior to the date
of this Agreement (the "Assigned Office").  A promotion, that is accepted by the
Executive, shall not constitute Good Reason;
(b) a material failure by the Bank to vest in the Executive the functions,
duties, or responsibilities customarily associated with the Assigned Office;
provided that the Executive shall have given notice of such failure to the Bank,
and the Bank has not fully cured such failure within thirty (30) days after such
notice is deemed given; and provided further, that a business decision by the
Bank, such as expanding or decreasing a line of business, shall not constitute
Good Reason;
(c) any material reduction of the Executive's rate of base salary in effect from
time to time, or any failure (other than due to reasonable administrative error
that is cured promptly upon notice) to pay any portion of the Executive's
compensation as and when due;
(d) any change in the terms and conditions of any compensation or benefit
program in which the Executive participates which, either individually or
together with other changes, has a material adverse effect on the aggregate
value of his total compensation package; provided that the Executive shall have
given notice of such material adverse effect to the Bank, and the Bank has not
fully cured such material adverse effect within thirty (30) days after such
notice is deemed given; provided, however, that this section 1.8(d) shall not
apply if the change in the terms and conditions of the compensation or benefit
program affects all participants in such program equally;
 
2

--------------------------------------------------------------------------------

(e) any material breach by the Bank of any material term, condition or covenant
contained in this Agreement; provided that the Executive shall have given notice
of such material adverse effect to the Bank, and the Bank has not fully cured
such material adverse effect within thirty (30) days after such notice is deemed
given; or
(f) a change in the Executive's principal place of employment to a place that is
more than forty-five (45) miles away from the location of the Bank's office
located at 3111 Union Road, Orchard Park, New York 14127.
In the event that Executive desires to terminate employment with the Bank for
Good Reason, the Executive must provide the Bank with written notice no later
than forty-five (45) calendar days after the Executive knows or should have
known that Good Reason has occurred.  Following the Executive's notice, the Bank
shall have thirty (30) calendar days to rectify the circumstances causing the
Good Reason.  If the Bank fail to rectify the event(s) causing the Good Reason
within the thirty (30) day period after the Executive's notice, or the Bank
delivers to the Executive written notice stating that the circumstances cannot
or shall not be rectified, the Executive shall be entitled to assert Good Reason
and terminate employment on or before ninety (90) days after the delivery of the
Executive's notice.  Should Executive fail to provide the required notice in a
timely manner, Good Reason shall not be deemed to have occurred as a result of
that event.  The term of this Agreement shall not be deemed to have expired
during the notice period, however, as long as the Executive has provided notice
within the term.

1.9 "Separation from Service" means Executive's death, retirement or other
termination of employment within the meaning of Code Section 409A.  No
Separation from Service shall be deemed to occur due to military leave, sick
leave or other bona fide leave of absence if the period of the leave does not
exceed six months or, if longer, so long as Executive's right to reemployment is
provided by law or contract.  If the leave exceeds six months and Executive's
right to reemployment is not provided by law or by contract, then Executive
shall have a Separation from Service on the first date immediately following
such six-month period.
Whether a Separation from Service has occurred is determined based on whether
the facts and circumstances indicate that the Bank and Executive reasonably
anticipated that no further services would be performed after a certain date or
that the level of bona fide services Executive would perform after that date
(whether as an employee or as an independent contractor) would permanently
decrease to less than 50% of the average level of bona fide services performed
over the immediately preceding 36 months (or the lesser period of time in which
Executive performed services for the Bank).  The determination of whether
Executive has had a Separation from Service shall be made by applying the
presumptions set forth in the Treasury Regulations under Code Section 409A.
 
3

--------------------------------------------------------------------------------

1.10 "Vested Account Balance" means the portion of Executive's Account Balance
that is vested in accordance with the following vesting schedule:
 
Annual Period Ending December 31 of
 
Payment
2018
$ 212,374
2019
$ 290,211
2020
$ 375,457
2021
$ 468,666
2022
$ 570,430
2023
$ 681,379
2024
$ 802,189
2025
$ 933,576
2026
$  1,076,308
2027
$  1,231,202

 
Executive will become vested each December 31st (the "Vesting Date") only if the
Executive is employed with the Bank on the Vesting Date.  If a Separation from
Service occurs prior to a Vesting Date, the Vested Account Balance will not be
pro-rated.  Instead, the Vested Account Balance will be the amount as of the
December 31st preceding the date of Separation from Service.
For example, if the Executive is terminated without Cause or if the Executive
terminates employment for Good Reason on June 30, 2024, the Vested Account
Balance would be $681,379.

ARTICLE 2
TERM OF AGREEMENT
2.1 Term of Agreement.
This Agreement shall commence on the Effective Date and shall have a ten year
term, ending on March 29, 2028. Notwithstanding anything in this Agreement to
the contrary, the post-employment restrictions in Article 4 of this Agreement
shall survive the expiration of this Agreement as specifically set forth
therein.
 
4

--------------------------------------------------------------------------------

ARTICLE 3
PAYMENT OF BENEFITS
3.1 Normal Retention Payment.  If the Executive is continuously employed (which
shall include approved vacations and other approved leaves of absence) with the
Bank from the Effective Date through March 29, 2028, the Executive shall be paid
$1,400,000 ($1.4 million) in lieu of any other payment hereunder (the "Normal
Retention Payment").  The Normal Retention Payment will be paid in three equal
annual installments, in accordance with the following schedule:
Payment Date
 
Payment
March 29, 2028
$ 466,667
January 2, 2029
$ 466,667
January 2, 2030
$ 466,666

 
If the Executive dies after the date of the first Normal Retention Payment and
prior to the date of the final Normal Retention Payment, the remaining payments
shall be paid to the Executive's beneficiary in the same amount and schedule as
provided in this Section 3.1.

3.2 Early Retention Payment.  If the Executive's employment with the Bank is
terminated by the Bank without Cause or if the Executive terminates employment
for Good Reason, the Bank shall pay the Executive the Vested Account Balance in
lieu of any other payment hereunder (the "Early Retention Payment").  The Early
Retention Payment will be paid in three equal annual installments, with the
first payment payable within ten business days of the Date of Termination of
employment and the subsequent payments on the annual anniversary of the first
payment.

For example, if the Executive is terminated without Cause or if the Executive
terminates employment for Good Reason on June 30, 2024, the Vested Account
Balance would be $681,379, and the Bank will pay the Executive the following
amounts:

Payment Date
 
Payment
July 1, 2024
$ 227,127
July 1, 2025
$ 227,126
July 1, 2026
$ 227,126

 
If the Executive dies after the date of the first Early Retention Payment and
prior to the date of the final Early Retention Payment, the remaining payments
shall be paid to the Executive's beneficiary in the same amount and schedule as
provided in this Section 3.2.

Notwithstanding the foregoing, the Early Retention Payment is subject to and
conditioned upon the Executive's execution of a standard form general release,
which shall be provided by the Bank, and the Executive must execute the general
release within twenty-one (21) days after the Date of Termination and not
subsequently revoke it.
5

--------------------------------------------------------------------------------

3.3 Change in Control Payment.  If a Change in Control occurs, followed by
Executive's Separation of Service within two years of a Change in Control and
prior to the date of the first Normal Retention Payment, the Bank shall pay the
Executive $1,400,000 ($1.4 million) in lieu of any other payment hereunder (the
"Change in Control Payment").  The Change in Control Payment shall be paid in a
lump sum within ten business days following the date of the Separation from
Service.
3.4 Death Prior to Normal Retention Payment.  In the event the Executive dies
while employed with the Bank and prior to March 29, 2028, the Bank shall pay the
Executive's beneficiary the Vested Account Balance in lieu of any other payment
hereunder.  The benefit shall be paid in a lump sum in the month following the
Executive's death.
3.5 Disability Payment.  In the event the Executive suffers a Disability prior
to March 29, 2028, the Bank shall pay the Executive the benefit under this
Section 3.5 in lieu of any other payment hereunder.  The Bank will pay the
Executive, as disability pay, a monthly payment equal to the Vested Account
Balance divided by thirty-six (36) (the "Disability Payment").  These Disability
Payments will commence six months following the date the Executive's employment
terminates due to Disability and will continue monthly until the earlier of (i)
the date Executive returns to the full-time employment of the Bank in the same
capacity as he was employed prior to his termination for Disability; (ii) the
date the Executive begins full-time employment with another employer; or (iii)
three years from the date of the first disability payment under this Section 3.5
(and to clarify, three years of payments will equal the Vested Account
Balance).  If the Executive dies while Disability Payments are being made under
this Section 3.5, the remaining payments (the portion of the thirty-six (36)
payments not yet paid) shall be paid to the Executive's beneficiary in the same
monthly schedule as paid prior to death.   If the Executive receives Disability
Payments under this Section 3.5, and the Executive returns to employment with
the Bank, the Executive shall not be entitled to any further payments under this
Agreement.
3.6 Termination with Cause or without Good Reason.  If Executive's employment
with the Bank is terminated by the Bank for Cause or if the Executive terminates
employment without Good Reason, the Bank shall have no obligation to make any
payments to the Executive under this Agreement.  Any termination of the
Executive's employment by the Bank for Cause shall be communicated by a notice
of termination to the Executive.  The notice of termination shall be a written
notice indicating in reasonable detail the facts and circumstances claimed to
provide a basis for termination of the Executive's employment under this
provision.
3.7 Withholding and Section 409A of the Code.  The Bank shall withhold from all
payments under this Agreement all federal, state, city or other income and
employment taxes that shall be required.
3.8 Possible Six Month Delay.  Notwithstanding the foregoing, if the Executive
is a "specified employee" within the meaning of Code Section 409A(a)(2)(B)(i)
and the payment is due to the Executive's Separation from Service, then to the
extent necessary to comply with Code Section 409A, the payment shall be delayed
to provide that no payment shall be made until the expiration of six (6) months
following the Date of Termination.  In the event that payment is so delayed, the
first payment that would otherwise be made shall be made to Executive on the
first day of the seventh month following the Date of Termination.
6

--------------------------------------------------------------------------------

ARTICLE 4
POST-EMPLOYMENT RESTRICTIONS
4.1 Two Year Non-Solicitation.  The Executive hereby covenants and agrees that,
for a period of two years following his termination of employment with the Bank,
he shall not, without the written consent of the Bank, either directly or
indirectly (i) solicit, offer employment to, or take any other action intended
(or that a reasonable person acting in like circumstances would expect) to have
the effect of causing any Executive or employee of the Bank or any of its
affiliates to terminate his or her employment and accept employment or become
affiliated with, or provide services for compensation in any capacity whatsoever
to, any business or other entity; or (ii) solicit, provide any information,
advice or recommendation or take any other action intended (or that a reasonable
person acting in like circumstances would expect) to have the effect of causing
any customer of the Bank or its affiliates to terminate an existing business or
commercial relationship with the Bank or its affiliates.
4.2 Non-Competition.  The Executive hereby covenants and agrees that, during the
term that the Bank is making payments to the Executive under this Agreement,
which may be up to approximately two or three years, the Executive shall not,
without the written consent of the Bank, either directly or indirectly become an
executive, employee, consultant, director, independent contractor, agent, sole
proprietor, joint venturer, greater than 5% equity-owner or stockholder, partner
or trustee of any savings bank, savings and loan association, savings and loan
holding company, credit union, bank or bank holding company, insurance company
or agency, any mortgage or loan broker or any other entity that has headquarters
or offices within thirty-five (35) miles of the locations in which the Bank or
its affiliates has business operations or has filed an application for
regulatory approval to establish an office as of the Date of Termination
("Non-Competition Restriction"); provided, however, that the Non-Competition
Restriction shall not apply if: (i) the Executive's employment is terminated
following a Change in Control, or (ii) the Executive is not entitled to any
payments under this Agreement.  If the Executive, without prior written approval
of the Board, breaches the Non-Competition Restriction, the Executive will be
entitled to retain any payments made before the date the Non-Competition
Restriction was breached; however, the Bank will not make, and the Executive
will not be entitled to, any further payments to the Executive under this
Agreement after the date of such breach.
4.3 Confidentiality.  Executive will remain obligated under any confidentiality
or nondisclosure agreement with or policy of the Bank that is currently in
effect or to which the Executive may in the future be bound.  In addition to and
without limitation of the foregoing Executive understands, acknowledges and
agrees to the following:
(a) During the course of Executive's employment with the Bank, certain
confidential information may have been divulged to or become known by Executive
in the nature of, but not limited to (1) information concerning the Bank and its
affiliates' current, former and prospective employees; (2) business practices
and business plan;
7

--------------------------------------------------------------------------------

(3) customer information; (4) contract information; (5) marketing strategies;
(6) business plans; (7) product information; (8) policies and procedures; (9)
financial, pricing and wage information; (10) administrative information; (11)
future plans of the Bank and its affiliates; (12) and other trade secrets, which
is valuable, confidential information of the Bank or its affiliates (all of
which is referred to herein as "Confidential Information"), which Confidential
Information has been uniquely developed by the Bank and its affiliates and
cannot be readily obtained by third parties from outside sources. For purposes
of this Section 4.3, the term "Confidential Information" shall not include
information which: (i) is contained in a printed publication available without
restriction to the general public; (ii) is or becomes publicly known or
available through no wrongful act of the Executive; (iii) is already known by
any recipient prior to the receipt of such information from Executive; (iv) is
furnished to any person or party by a third party without breach of any
confidentiality obligations hereunder by Executive; or (v) is independently
developed by the recipient without any breach of this Agreement by Executive.
(b) The Confidential Information is important and is an essential asset of the
Bank.
(c) Executive's knowledge of the Confidential Information could be useful to a
competitor of the Bank and its affiliates which do or intend to do business in
competition with the Bank or its affiliates.
In recognition of the facts expressed above, Executive expressly agrees that
Executive shall not use for Executive's personal benefit, or disclose,
communicate or divulge to, or use for the direct or indirect benefit of any
person, firm, association or company, any confidential or competitive material
or information of the Bank or its affiliates, or Confidential Information.
4.4 Reasonableness of Restrictions; Available Remedies.
(a) The Bank acknowledges and agrees that the duties of Executive may require
that Executive must have and continue to have throughout the period of
employment the benefits and use of its goodwill, confidential information and
trade secrets to properly carry out Executive's responsibilities, and that the
Bank accordingly promises to provide Executive with access to new and additional
confidential information and trade secrets as they are generated, without regard
to the duration of his employment, and to authorize Executive to engage in
activities that will create new and additional confidential information and
trade secrets.  Executive and the Bank agree that the restrictions contained in
Sections 4.1 and 4.2 of this Agreement are fair and reasonable in all respects,
including the geographic and temporal restrictions, and that the benefits
described in this Agreement, to the extent any separate or special consideration
is necessary, are fully sufficient for Executive's obligations under this
Agreement.

(b) If the Executive is deemed to have materially breached the non-competition
covenants set forth in Section 4.1 hereof or the confidentiality covenants set
forth in Section 4.2 hereof, the Bank may, in addition to seeking an injunction
or any other remedy it may have, withhold or cancel any remaining payments or
benefits due to the Executive pursuant to this Agreement.  The Bank shall give
prior or contemporaneous written notice of such withholding or cancellation of
payments.  If the Executive violates any of these covenants, the Bank shall be
further entitled to an immediate preliminary and permanent injunctive relief,
without bond, in addition to any other remedy which may be available to the
Bank.
8

--------------------------------------------------------------------------------

ARTICLE 5
ADMINISTRATION
5.1 Compensation Committee.  The Compensation Committee of the Bank shall be
responsible for the management, operation, and administration of this
Agreement.  When making a determination or calculation, the Compensation
Committee shall be entitled to rely on information furnished by the Bank,
Executive or Beneficiary.
5.2 Binding Effect of Decision.  The decision or action of the Compensation
Committee with respect to any question arising out of or in connection with the
administration, interpretation or application of this Agreement and the rules
and regulations promulgated hereunder shall be final, conclusive and binding
upon all persons having any interest in this Agreement, provided, however, that
nothing contained herein shall prohibit, restrict, impair or limit the rights
and remedies of Executive under Section 5.6 of this Agreement.
5.3 Compliance with Code Section 409A.  The Compensation Committee and the
Executive intend that the Agreement comply with the provisions of Code Section
409A to prevent the inclusion in gross income of any amounts deferred hereunder
in a taxable year prior to the year in which amounts are actually paid to the
Executive or Beneficiary.  This Agreement shall be construed, administered and
governed in a manner that affects such intent, and the Administrator shall not
take any action that would be inconsistent therewith.
5.4. Successors and Assigns.  This Agreement shall be binding upon and inure to
the benefit of the Bank and Executive and their respective devisees, heirs,
legal or personal representatives, successors and assigns.  Notwithstanding the
foregoing, this Agreement is personal to the Executive and the rights and
obligations hereunder may not be assigned by Executive without the prior written
consent of the Bank.
5.5. Notice.  Any communication required or permitted to be given under this
Agreement, including any notice, direction, designation, consent, instruction,
objection or waiver, shall be in writing and shall be deemed to have been given
at such time as it is delivered personally, or five (5) days after mailing if
mailed, postage prepaid, by registered or certified mail, return receipt
requested, addressed to such party at the address listed below or at such other
address as one (1) such party may by written notice specify to the other party:
If to the Executive:
To the last address for the Executive contained in the records of the Company or
Bank

 
9

--------------------------------------------------------------------------------

If to the Company or the Bank:
Lake Shore Bancorp, Inc.
31 East 4th Street
Dunkirk, New York 14048
Attention:    Chairman, Compensation Committee
of the Board of Directors
5.6. Arbitration.  Any dispute or controversy arising under or in connection
with this Agreement shall be settled exclusively by binding arbitration, as an
alternative to civil litigation and without any trial by jury to resolve such
claims, conducted by a single arbitrator, mutually acceptable to the Bank and
Executive, sitting in the City of Buffalo, County of Erie and State of New York,
in accordance with the rules of the American Arbitration Association's National
Rules for the Resolution of Employment Disputes ("National Rules") then in
effect.  Judgment may be entered on the arbitrator's award in any court having
jurisdiction.
To the extent that such payment(s) may be made without triggering penalty under
Code Section 409A, all reasonable legal fees paid or incurred by Executive
pursuant to any dispute or question of interpretation relating to this Agreement
shall be paid or reimbursed by the Bank, provided that the dispute or
interpretation has been settled by Executive and the Bank or resolved in
Executive's favor, and such reimbursement shall occur no later than sixty (60)
days after the end of the year in which the dispute is settled or resolved in
Executive's favor.
ARTICLE 6
MISCELLANEOUS
6.1 Except insofar as this provision may be contrary to applicable law, no sale,
transfer, alienation, assignment, pledge, collateralization or attachment of any
benefits under this Agreement shall be valid or recognized by the Bank.
6.2 This Agreement is an unfunded deferred compensation arrangement for a member
of a select group of the Bank management and any exemptions under ERISA, as
applicable to such arrangement, shall be applicable to this Agreement.  Nothing
in this Agreement shall require or be deemed to require the Bank to segregate,
earmark or otherwise set aside any funds or other assets to provide for any
payments made or required to be made hereunder.
6.3 It is understood acknowledged and agreed that Executive is and will be an
"at will" employee of the Bank.   Nothing in this Agreement shall be deemed to
create an employment agreement between the Executive and the Bank nor shall it
be deemed to modify or undercut the Executive's at will employment status with
the Bank.
6.4  It is understood and agreed by the Bank and Executive that the terms of
this are intended to comply in all respects with the requirements of Code
Section 409A.
6.5 The provisions of this Agreement shall not reduce any amounts otherwise
payable, or in any way diminish the Executive's rights as an employee of the
Bank, whether existing now or hereafter, under any benefit, incentive,
retirement, stock option, stock bonus or stock purchase plan, or other plan or
arrangement, including the Executive's Amended and Restated Supplemental Benefit
Plan II or similar plan.
10

--------------------------------------------------------------------------------

6.6 This Agreement sets forth the entire agreement between the parties with
respect to the matters set forth herein and supersedes in their entirety any
prior written or oral agreements or understandings between Executive and the
Bank regarding the subject matter of this Agreement.  This Agreement may not be
modified or amended except by written agreement intended as such and signed by
all parties.
6.7 Executive and the Bank respectively acknowledge that each of them has read
and understands this Agreement, that they have each had adequate time to
consider this Agreement and discuss it with each of their attorneys and
advisors, that each of them understands the consequences of entering into this
Agreement, that each of them is knowingly and voluntarily entering into this
Agreement, and that they are each competent to enter into this Agreement.
6.8 Executive shall not during the term of this Agreement or any time
thereafter, disparage the Bank, its affiliates, and /or respective Executives,
employees or directors, or engage in conduct resulting in, or likely to result
in, damage to the business or professional reputation of the Bank or its
affiliates.  The Bank agrees that it will not at any time disparage Executive or
engage in conduct resulting in, or likely to result in, the damage to the
business or professional reputation of Executive.
6.9 If any provision of this Agreement is determined to be unenforceable, the
remainder of this Agreement shall not be affected but each remaining provision
shall continue to be valid and effective and shall be modified so that it is
enforceable to the fullest extent permitted by law.
6.10 Except to the extent that federal law controls, this Agreement is to be
construed according to New York law, except to the extent superseded by federal
law.
6.11 Notwithstanding anything herein contained to the contrary, any payments to
Executive by the Bank, whether pursuant to this Agreement or otherwise, are
subject to and conditioned upon their compliance with Section 18(k) of the
Federal Deposit Insurance Act, 12 U.S.C. Section 1828(k), and the regulations
promulgated thereunder in 12 C.F.R. Part 359.
[Signatures on following page.]
11

--------------------------------------------------------------------------------

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

/s/ Jeffrey M. Werdein__________________
Jeffrey M. Werdein

LAKE SHORE SAVINGS BANK

By: /s/ Kevin M. Sanvidge_______________

Its:  Chairman of the Compensation Committee
        of the Board of Directors_____________

 
12