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                                                                   EXHIBIT 10.13

                     FIRST AMENDMENT TO EMPLOYMENT AGREEMENT


                  THIS FIRST AMENDMENT TO EMPLOYMENT AGREEMENT ("Amendment"), is
made and entered into as of this _____ day of ________, 1998, to be effective as
of September 23, 1998 ("Effective Date"), by and between LOCAL FINANCIAL
CORPORATION, a Delaware corporation ("LFC"), its wholly-owned subsidiary bank,
LOCAL FEDERAL BANK, F.S.B., a federally chartered stock savings bank ("Bank"),
both with address of 3601 N. W. 63rd Street, Oklahoma City, Oklahoma 73116, and
EDWARD A. TOWNSEND, an individual resident of the State of Oklahoma, with
mailing address of 28910 South 593, Grove, Oklahoma 74344 ("Townsend").

                                R E C I T A L S:

                  A. LFC and Bank made and entered into that certain Employment
Agreement with Townsend dated September 8, 1997 ("Agreement") whereby LFC and
Bank employed Townsend to serve as the Chairman of the Board of Directors and
Chief Executive Officer of LFC and of the Bank, respectively, and to manage and
direct the conduct of their banking businesses pursuant to the terms and
conditions and for the compensation and benefits to be paid to Townsend as set
forth and fully described in the Agreement. Townsend has well and fully served
as the Chairman of the Board of Directors and Chief Executive Officer of LFC and
of the Bank since the date of the Agreement and continues to so serve as of the
effective date of this Amendment.

                  B. LFC, Bank and Townsend are desirous of amending the
Agreement to more specifically provide for the severance benefits which Townsend
might become entitled to receive in the event of a "Change of Control," as that
term is defined below in this Amendment, occurring to LFC or the Bank during the
term of the Agreement. The purpose and effect of this Amendment is to
specifically provide benefits and protection to Townsend in the event of the
occurrence of such a Change of Control and to supplement his existing rights and
benefits in that regard as currently set forth in the Agreement.

                  C. Accordingly, LFC, the Bank and Townsend are desirous of
entering into this Amendment in order to specifically provide for benefits and
protection to Townsend in the event of the occurrence of a Change of Control, as
defined herein, occurring to LFC or the Bank during the term of the Agreement
and to amend certain specific provisions of the Agreement in order to make them
consistent with the benefits and protection being accorded to Townsend by the
provisions of this Amendment.

                  NOW, THEREFORE, in consideration of the aforementioned
recitals, the premises, the mutual covenants set forth herein and of such other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged by LFC, the Bank and Townsend, respectively, they do each hereby
covenant and agree as follows:

                  1. SECTION 3 - COMPENSATION. Section 3 - Compensation of the
Agreement is hereby completely amended and fully restated in its entirety to
read henceforth as follows:



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                  3.       COMPENSATION.

                  (a) The Bank agrees to pay Townsend as a guaranteed salary
         throughout the term of this Agreement, unless Townsend voluntarily
         resigns without "Good Reason" as that term is defined in Section 10,
         below, of this Agreement, as amended, from his employment by LFC and by
         Bank during the term of this Agreement, or unless this Agreement is
         terminated for "Cause" by LFC or the Bank, as set forth and described
         in Section 9, below, in this Agreement, an annual base salary for the
         services rendered to LFC and Bank by Townsend, as described above, in
         the amount of Three Hundred Twenty Thousand and No/100 Dollars
         ($320,000.00) per year. This salary shall be payable to Townsend in
         twelve (12) equal, monthly installments of Twenty-Six Thousand Six
         Hundred Sixty-Six and 67/100 Dollars ($26,666.67) per month for each
         month during which services are rendered by Townsend to LFC or the Bank
         during the term of this Agreement. LFC and Bank covenant and agree that
         the amount of salary to be paid to Townsend cannot be decreased by LFC
         or Bank during the term of this Agreement for any reason and must be
         paid to Townsend in all events each month during the term of this
         Agreement unless Townsend voluntarily resigns from his employment by
         LFC and the Bank without "Good Reason" during the term of this
         Agreement, or unless Townsend is terminated for "Cause" by the Bank for
         the specific reasons set forth and described below in Section 9 of this
         Agreement. Accordingly, LFC and Bank agree that if during the term of
         this Agreement, (i) Townsend resigns with "Good Reason," or (ii)
         Townsend is terminated by LFC and the Bank without "Cause," as defined
         below in Section 9 of this Agreement, he shall still be entitled to
         receive as liquidated damages for the termination of his employment in
         either such event, under this Agreement; the full amount of his
         remaining guaranteed salary under this Agreement to be paid to him in
         the amount of Twenty-Six Thousand Six Hundred Sixty-Six and 67/100
         Dollars ($26,666.67) per month in the same manner as if he had remained
         employed by LFC or the Bank during the entire term of this Agreement.
         It is expressly provided, however, that the foregoing obligations shall
         be supplemental to and cumulative of the specific severance benefit
         entitlements being granted to Townsend under the provisions of
         Paragraph 10 of this Agreement, below, which shall be deemed to be the
         applicable benefits and entitlements of Townsend in the event a "Change
         of Control," as that term is defined in Paragraph 10 of this Agreement,
         below, occurs to LFC or the Bank during the term of this Agreement.
         Townsend, LFC and the Bank hereby expressly covenant and agree,
         anything in this Agreement to the contrary notwithstanding, including,
         without limitation, the provisions of Sections 3 through 6 and Sections
         9 and 10 of this Agreement, as amended, that any payments made to
         Townsend by Bank pursuant to this Agreement, or otherwise, are in all
         respects expressly subject to and conditioned upon their compliance
         with the provisions of 12 U.S.C. ss. 1828(k) and any regulations
         promulgated thereunder.

                  (b) Bank shall pay Townsend his annual base salary on a
         monthly basis on the first day of each month, subject to normal salary
         deductions for the amount so owing, including, but not limited to,
         Social Security, Medicare, federal and state income withholding taxes.
         Townsend's base annual salary may be increased in the future, from time
         to time, by the actions of LFC's or the Bank's Board of Directors,
         based upon Townsend's performance and other relevant factors and LFC's
         or the Bank's Board of Directors will review Townsend's salary for the
         purposes of determining any appropriate increase in the base annual
         salary of 


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         Townsend at least annually. In addition, LFC or Bank may, from time to
         time, enter into supplemental agreements or memoranda in writing with
         Townsend for the award and payment to him of additional compensation or
         bonuses upon such terms and conditions as LFC or Bank shall deem to be
         in their respective best interests, and in the event of the execution
         by LFC or Bank of any such agreement or memoranda, the right of
         Townsend to additional compensation or bonuses shall be determined in
         accordance with the applicable provisions thereof. In the absence of
         any such supplemental agreements or memoranda and expressly subject to
         Townsend's rights and benefits in the event of a "Change of Control"
         occurring to LFC or the Bank, as set forth in Paragraph 10 of this
         Agreement, below, neither LFC nor Bank shall be obligated to pay to
         Townsend any additional compensation or bonus whatsoever, irrespective
         of the payments of additional compensation or bonus to Townsend in any
         past or succeeding year, or the payment of additional compensation or
         bonus to other employees of LFC or the Bank at the end of the year, but
         may do so in the sole discretion of LFC's or the Bank's Board of
         Directors, respectively, and the determination of LFC's or the Bank's
         Board of Directors, respectively, in the exercise of such discretion,
         with respect to the payment and amount of any additional compensation
         or bonus to Townsend for any fiscal year of LFC or Bank if made, shall
         be final and conclusive.

                  2. SECTION 9(a) AND (f) - TERMINATION OF EMPLOYMENT. The
provisions of Section 9(a) and (f), respectively, of the Agreement are hereby
completely amended and fully restated as set forth below, with all of the other
existing subsections of Section 9 of the Agreement, i.e., subsections (b) - (e)
thereof, to remain in full force and effect as originally stated:

                  9.       TERMINATION OF EMPLOYMENT.

                  (a) The Board of Directors of the Bank and/or the Board of
         Directors of LFC, respectively, may terminate Townsend's employment by
         the Bank and/or by LFC, respectively, under this Agreement, with or
         without "Cause," at any time during the term hereof, effective upon
         delivery of written notice to that effect to Townsend, but any such
         termination by the Bank or LFC, as the case may be, of Townsend other
         than termination of his employment for "Cause," as defined below in
         this Section 9, shall not prejudice Townsend's right to receive the
         full amount of the remaining compensation which would have otherwise
         been paid him throughout the term of this Agreement on the same basis
         and at the same times and to receive all such other fringe benefits to
         which he would have otherwise been entitled to receive during the term
         of this Agreement, subject to Townsend's cumulative and supplemental
         rights to receive the severance benefits specifically accorded to him
         pursuant to the provisions of Section 10, below, of this Agreement,
         which shall arise in the event that a "Change of Control," as defined
         in Section 10, occurs to LFC or the Bank during the term of this
         Agreement, which said rights, benefits and entitlements as set forth in
         Section 10 shall, in such event, be deemed to control over the benefits
         and entitlements accorded to Townsend under this Section 9, to the
         extent they are in any way inconsistent therewith. On the other hand,
         Townsend shall not have any right to receive any further compensation
         or any other benefits to which he would have otherwise been entitled
         under this Agreement after his voluntary resignation from his
         employment by the Bank or LFC, without "Good Reason," as that term is
         defined below in Section 10 of this Agreement, or after his termination
         from his employment for "Cause" by the Bank or LFC, in accordance 



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         with the terms of this Agreement, except for the vested rights of
         Townsend hereunder, i.e., any and all compensation benefits and rights
         which Townsend was entitled to receive prior to the effective date of
         such termination. For all purposes under this Agreement, termination
         for "Cause" shall mean termination because of Townsend's personal
         dishonesty, incompetence, willful misconduct, breach of fiduciary duty
         involving personal profit, intentional failure to perform stated duties
         under this Agreement, willful violation of any law, rule or regulation
         (other than traffic violations or similar offenses) or of a final
         cease-and-desist order, or any material breach by Townsend of any
         provisions of this Agreement or the death or permanent disability, as
         that term is defined below, of Townsend occurring during the term of
         this Employment Agreement. For purposes of this Employment Agreement,
         the term "permanent disability" shall mean if Townsend shall have an
         illness, injury or other physical or mental condition which results in
         Townsend's inability to perform substantially all of the duties he
         performs in his employment capacity for the Bank or LFC to the extent
         he was performing such duties immediately prior to the commencement of
         such condition and that such disability has continued for a period of
         more than six (6) months during the term of this Employment Agreement.
         If Townsend shall be so disabled for more than six (6) months during
         the term of this Employment Agreement, the employment of Townsend by
         the Bank and LFC shall be deemed by reason of his said permanent
         disability to have been for all purposes hereunder terminated for
         "Cause." In determining the incompetence of Townsend, the acts or
         omissions of Townsend shall be measured against standards generally
         prevailing in the federal savings bank industry. Unless Townsend
         voluntarily resigns from his employment by LFC and the Bank without
         "Good Reason," as that term is defined in Section 10 below, during the
         term of this Agreement, or unless the termination by the Bank or LFC of
         Townsend's employment under this Agreement is for "Cause," as defined
         above, LFC and the Bank shall be obligated to continue to pay to
         Townsend his compensation and to provide to him all other benefits of
         his employment as set forth in this Agreement during the remaining term
         of this Agreement after the termination of his employment on the same
         basis and at the same times as set forth and described above in this
         Agreement, subject to Townsend's cumulative and supplemental right to
         receive the specific severance benefits accorded him under the
         provisions of Section 10, below, in this Agreement, in the event a
         "Change of Control" occurs to LFC or the Bank, as defined in Section 10
         below, which Section shall prevail over the rights and benefits
         accorded to Townsend under this Section 9 to the extent they are
         inconsistent therewith. LFC, the Bank and Townsend agree that it would
         be difficult to ascertain the amount of damages owing to Townsend if
         this Agreement is terminated without "Cause" or he resigns for "Good
         Reason" during the term of this Agreement, and accordingly, that the
         amount to be paid by LFC and Bank to Townsend as compensation and the
         other benefits to be provided by LFC and Bank to Townsend during the
         remaining term of this Agreement as if Townsend had remained employed
         by LFC or the Bank in such instance, shall be deemed to be liquidated
         damages for the termination of this Agreement by Bank or LFC without
         "Cause," or for Townsend's resignation for "Good Reason," and not as a
         forfeiture or penalty. Townsend, LFC and Bank specifically covenant and
         agree that the amount of liquidated damages, as determined in the
         manner set forth above in this Section 9, would be a fair and
         reasonable amount of damages for Townsend to receive due to the
         termination of his employment under such circumstances and that the
         right to receive such compensation as liquidated damages shall be
         Townsend's sole and only remedy in such event, except for and subject
         to the prior and superior rights of Townsend to the 


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         severance benefits set forth and described in Section 10, below, of
         this Agreement, which shall be deemed to control and supersede the
         rights of Townsend under this Section 9, in the event a "Change of
         Control" occurs to LFC or the Bank, as defined and described in Section
         10, below.

                                     * * *

                  (f) If Townsend resigns voluntarily from his employment by the
         Bank during the term of this Agreement without "Good Reason," as that
         term is defined in Section 10, below, of this Agreement, then, and in
         such event, all of the rights, benefits and entitlements of Townsend
         under this Agreement, including without limitation, his right to
         receive salary payments, shall cease on the date of such voluntary
         resignation without "Good Reason," except for the rights of Townsend
         which have vested prior to the date of his said voluntary resignation.

                  3. SECTION 10 - SEVERANCE BENEFITS IN THE EVENT OF A CHANGE OF
CONTROL. The following entirely new Section shall be added by this Amendment to
the Agreement, numbered 10 and entitled "Severance Benefits in the Event of a
Change of Control," and the subsequent paragraphs shall be renumbered
accordingly, i.e., the existing Section 10 shall become Section 11, and the
existing Sections 11, 12, 13 and 14 shall become Sections 12, 13, 14 and 15,
respectively. The new Section 10 - Severance Benefits in the Event of a Change
of Control, shall read henceforth in its entirety as follows:

                  10. SEVERANCE BENEFITS IN THE EVENT OF A CHANGE OF CONTROL.

                  (a) For all purposes in this Amendment and in the Agreement
         and in, particular, this Section 10, the following terms shall have the
         respective meanings specified below:

                           (i) "Annual Cash Compensation" means the sum of (a)
                  Townsend's annual base salary in effect as of the date of this
                  Agreement, or if greater, Townsend's base salary in effect at
                  the time of the Change of Control, and (b) the amount of any
                  cash bonuses paid to Townsend during the twelve-month period
                  immediately preceding the effective date of a Change of
                  Control.

                           (ii) "Bank" means (x) the Bank until a Change of
                  Control, and (y) the successor to the Bank upon a Change of
                  Control (the "Successor").

                           (iii) "Cause" shall have the same meaning ascribed to
                  that term in Section 9, above, in the Agreement.

                           (iv) "Change of Control" shall for all purposes in
                  this Agreement and Amendment mean the occurrence of any of the
                  following events:

                                    (x) the consummation of any agreement of
                           merger, statutory share exchange or consolidation
                           pursuant to which either the Company, or the Bank, is
                           merged or consolidated into, or all of the
                           outstanding shares of the Company's or the Bank's
                           common stock are acquired by, another corporation,



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                           partnership, limited liability company or
                           partnership, or any other business entity; or

                                    (y) another corporation or such other
                           business entity is merged or consolidated into the
                           Company or the Bank in circumstances under which the
                           outstanding shares of the Company's or the Bank's
                           common stock are converted into or exchanged for cash
                           or securities of another such corporation or entity
                           which was not a wholly-owned subsidiary of the
                           Company or the Bank at all times within one year
                           prior to the said merger or consolidation; or

                                    (z) (1) the consummation of a sale of fifty
                           percent (50%) or more of the issued and outstanding
                           common stock of the Bank by the Company; or (2) fifty
                           percent (50%) or more of the issued and outstanding
                           common stock of the Company is acquired by persons
                           (including corporations or any other form of business
                           entity) who are acting in concert; or (3) the
                           consummation of the sale of all or substantially all
                           of the assets of the Bank by the Company or of the
                           Company by the Bank.

                           (v) "Good Reason" with respect to Townsend shall have
                  the following meaning for all purposes under the Agreement and
                  this Amendment:

                                    (v) A significant diminution of his Role, as
                           that term is defined below in this Section 10, if the
                           diminution in his Role is not reasonably related to
                           an adverse change in his performance of his assigned
                           duties at LFC or the Bank; provided that Good Reason
                           shall not exist under this clause in the case of
                           termination for Cause, as that term is defined in
                           Section 9, or diminution of his Role by reason of the
                           voluntary actions of Townsend, or on account of
                           disability, retirement or death, as described and
                           defined herein, or the voluntary termination by
                           Townsend of his employment with LFC or Bank other
                           than for a Good Reason, as defined hereunder;

                                    (w) A reduction in the base salary and/or
                           bonuses paid to Townsend to an amount such that the
                           sum of his base salary and bonuses as so reduced is
                           less than the sum of his base salary and bonuses as
                           of the date of this Amendment, or at any time while
                           the Agreement is in force if Townsend receives an
                           increase in salary or bonus after the date of this
                           Amendment, or a failure after twenty (20) days'
                           written notice by Townsend to LFC and the Bank of LFC
                           or the Bank to pay Townsend any installment owing to
                           him of such salary or bonus;

                                    (x) The failure by LFC or Bank to provide
                           Townsend with any material benefit that is provided
                           to the executive officers of LFC and the Bank
                           generally, or any action or inaction by LFC or the
                           Bank which could adversely affect his continued
                           participation in any benefit plan, entitlements 



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                           or other arrangements of Bank or LFC, or his ability
                           to enjoy or realize upon any material benefit under
                           any such plan, entitlement or arrangement;

                                    (y) LFC's or the Bank's assigning Townsend,
                           without his prior written consent, to perform his
                           duties under the Agreement at a location anywhere
                           other than Oklahoma County, State of Oklahoma; or

                                    (z) The failure by LFC or the Bank to obtain
                           the assumption of all of their obligations under this
                           Amendment and the Agreement and under the 1998
                           Non-Qualified Stock Option Agreement being made and
                           entered into by and between LFC and Townsend this
                           same date by the Successor, or to otherwise comply
                           with the terms and provisions of subparagraph (c) of
                           this Section 10, below.

                           (vi) "LFC" means (x) LFC until a Change of Control,
                  and (y) the successor to LFC upon a Change of Control (the
                  "Successor").

                           (vii) "Role" shall have the meaning for all purposes
                  under this Amendment and the Agreement of (x) prior to any
                  Change of Control, as defined herein, Townsend's authority or
                  responsibilities with the Bank or LFC on the date of this
                  Amendment; or any enhanced Role (other than by way of an
                  interim or otherwise expressly temporary appointment) to which
                  he had ascended from the date of this Amendment to the date of
                  any Change of Control; and (y) after any Change of Control,
                  the authority and responsibilities with the Successor
                  described in writing by such Successor prior to the Change of
                  Control and which is reasonably commensurate with Townsend's
                  Role, as defined in clause (x) above, in this definition.

                           (viii) "Severance Period" shall for all purposes in
                  this Amendment and the Agreement mean a period of years after
                  Townsend's termination that is equal to the number by which
                  Townsend's Annual Cash Compensation is multiplied to determine
                  the Severance Benefit payable under the provisions of the
                  Agreement.

                           (ix) "Successor" shall mean for all purposes in this
                  Amendment and the Agreement any entity that assumes the
                  obligations of LFC and the Bank under this Amendment and the
                  Agreement pursuant to subparagraph (c)(1), below.

                  (b) If at any time during the period beginning on the date of
         this Amendment and ending on the third anniversary of a Change of
         Control occurring to LFC or the Bank, as specifically defined and
         described above in this Paragraph 10, the employment of Townsend is
         terminated (x) by LFC or the Bank, or their respective Successor,
         without "Cause" or (y) by Townsend for "Good Reason," as that term is
         expressly defined above, then, in addition to all amounts otherwise
         payable to Townsend upon his termination hereunder, LFC, the Bank
         and/or the Successor shall be expressly obligated to pay to Townsend
         the following:



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                           (i) The Bank or the Successor shall pay to Townsend
                  and LFC, or the Successor, shall cause the Bank or the
                  Successor to pay to Townsend, an amount (the "Severance
                  Benefit") equal to the sum of his Annual Cash Compensation,
                  multiplied by three (3), payable in equal quarterly
                  installments from the date of said termination until the date
                  which is three (3) years from the date of said termination,
                  with the first installment thereof being due and payable
                  within five (5) days after the date of such termination of
                  Townsend's employment. Townsend shall have no obligation to
                  seek other employment or to otherwise attempt to mitigate the
                  effect of this Section 10 of this Agreement or the benefits
                  payable hereunder in order to be entitled to receive the
                  Severance Benefit or the other benefits hereunder, and any
                  payment received by Townsend from other employment shall not
                  serve to reduce in any way the amount of the Severance Benefit
                  payable to him hereunder.

                           (ii) During the Severance Period, Townsend shall be
                  entitled to all benefits under the group hospitalization plan,
                  healthcare plan, dental plan, life or other insurance or death
                  benefit plan, or any similar benefit plan or program of LFC
                  and the Bank or the Successor for which key executives of LFC,
                  the Bank or the Successor are eligible, to the same extent as
                  if Townsend had continued to be an employee of LFC or the Bank
                  at a compensation level equal to his Annual Cash Compensation,
                  and Townsend's share of the costs shall be the same as that
                  cost, if any, for which Townsend was responsible while an
                  employee of LFC and the Bank. If any such plan or program does
                  not permit continued participation by Townsend, or does not
                  permit continued participation by Townsend through the end of
                  the Severance Period, LFC, the Bank or the Successor shall
                  arrange to provide Townsend with substantially similar
                  benefits through the end of the Severance Period, with
                  Townsend responsible solely for that share of the costs with
                  regard to such benefits which he was formerly paying as
                  outlined above. At Townsend's sole and exclusive option,
                  Townsend may elect to be paid in cash an amount equivalent to
                  LFC's, the Bank's or the Successor's costs of providing such
                  benefits during the Severance Period, such election to be made
                  within thirty (30) days after Townsend's said termination of
                  employment, with such payment to be made to him within ten
                  (10) days after his delivery of such election to LFC, the Bank
                  or the Successor hereunder.

                           (iii) Any stock options, restricted stock or other
                  stock or stock-based awards to Townsend shall immediately vest
                  and become exercisable to the extent exercise is required and
                  all restrictions on the ability of Townsend to obtain the full
                  economic benefit of such vested awards shall immediately
                  lapse.

                  (c) LFC'S, BANK'S AND THE SUCCESSOR'S OPTION UPON THE
         OCCURRENCE OF A CHANGE OF Control. If LFC or the Bank enters into a
         definitive agreement that would result in a Change of Control, as
         defined herein, then LFC and the Bank may elect (i) to assign this
         Agreement, as amended, to the Successor effective on the occurrence of
         the Change of Control, provided that such Successor shall assume in
         writing all of the obligations of LFC and the Bank hereunder and under
         that certain 1998 Non-Qualified Stock Option Agreement by and between
         LFC and Townsend of even date herewith and shall expressly acknowledge
         that a Change of Control of LFC or the Bank has occurred within the
         meaning of this 




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         Agreement so as to entitle Townsend to the Severance Benefit and other
         benefits set forth in Section 10(b) of this Agreement, above, if his
         employment is thereafter terminated without Cause or he thereafter
         voluntarily terminates his employment for Good Reason and provided
         further that LFC and the Bank shall remain liable for the performance
         of all of their obligations under this Agreement if the Successor fails
         to so perform any of its obligations under this Agreement; or (ii) to
         terminate this Agreement upon written notice to Townsend given pursuant
         to the terms and conditions of this Amendment and the Agreement not
         later than thirty (30) days after the execution of any such definitive
         agreement to effect such a Change of Control, to be effective on the
         effective date of the Change of Control, and upon occurrence of the
         Change of Control, paying to Townsend, in readily available funds, his
         compensation and benefits to the date on which such termination shall
         take effect on the effective date of the Change of Control and the full
         amount of the Severance Benefit as provided for in this Section 10, and
         such other benefits as are also provided to Townsend as the result of a
         Change of Control, as set forth and provided in Section 10, above.

                  (d) TAXES. All payments to be made to Townsend under this
         Employment Agreement will be subject to required withholding of
         federal, state and local income and employment taxes. Notwithstanding
         anything in this Employment Agreement to the contrary, if any of the
         payments provided for in this Employment Agreement, together with any
         other payment which Townsend has the right to receive from the Bank, or
         any corporation which is a member of an "affiliated group" (as defined
         in Section 1504(a) of the Internal Revenue Code of 1986 ("Code")
         without regard to Section 1504(b) of the Code) of which the Bank is a
         member, would constitute a "parachute payment" (as defined in Section
         280Gb(2) of the Code), the payments pursuant to this Employment
         Agreement shall be reduced to the largest amount that will result in no
         portion of such payments being subject to the excise tax imposed by
         Section 4999 of the Code; provided, however, that the determination as
         to whether any reduction in the payment under this Agreement pursuant
         to this proviso is necessary shall be made by Townsend in good faith,
         and such reasonable determination shall be conclusive and binding upon
         the Bank with respect to its treatment of the payment for tax reporting
         purposes and, provided further, that Townsend may determine in his
         discretion what payment or payment provided for him herein shall be so
         reduced.

                  4. NO FURTHER CHANGES. Except as expressly stated above, there
are no further amendments or modifications of any sort or nature being made to
the Agreement and all of its other respective terms and conditions shall remain
in full force and effect as originally stated.

                  IN WITNESS WHEREOF, LFC, the Bank and Townsend have duly
executed this Amendment as of the day and year first above written to be
effective as of the date stated in the first paragraph above.



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LFC:                           LOCAL FINANCIAL CORPORATION,
                               a Delaware corporation



                               By:  
                                   --------------------------------------------
                               Name:    Jan A. Norton
                                    -------------------------------------------
                               Title:   President
                                     ------------------------------------------
                               Date:
                                    -------------------------------------------



BANK:                          LOCAL FEDERAL BANK, F.S.B.,
                               a federally chartered stock savings bank



                               By:
                                  ---------------------------------------------
                               Name:    Jan A. Norton
                                    -------------------------------------------
                               Title:   President
                                     ------------------------------------------
                               Date:
                                    -------------------------------------------




TOWNSEND:
                               ------------------------------------------------
                               EDWARD A. TOWNSEND
                               an Individual Resident of the State of Oklahoma


                               Date:
                                    -------------------------------------------