EMPLOYMENT AGREEMENT
            THIS EMPLOYMENT AGREEMENT (the "Agreement") is made and entered into as of this28th day of September 2001, by and between LSB Financial Corp. (the "Company") and RandolphF. Williams (the "Employee").

            WHEREAS, commencing on the September 17, 2001 (the "Commencement Date"), theEmployee will serve as the President of the Company and of the Company's wholly-owned subsidiary,Lafayette Savings Bank, FSB (the "Bank");

            WHEREAS, commencing on January 1, 2002, the Employee will also serve as the ChiefExecutive Officer of the Company and the Bank;

            WHEREAS, the board of directors of the Company (the "Board of Directors" or the "Board")believes it is in the best interests of the Company and its subsidiaries for the Company to enter intothis Agreement with the Employee in order to assure continuity of management of the Company andits subsidiaries; and

            WHEREAS, the Board of Directors has approved and authorized the execution of thisAgreement with the Employee to take effect on the Commencement Date;

            NOW, THEREFORE, in consideration of the foregoing and of the respective covenants andagreements of the parties herein, it is AGREED as follows:

            1.  Definitions.

                        (a)  The term "Change in Control" means (1) an acquisition of securities of theCompany or the Bank that is determined by the Board of Directors to constitute an acquisition ofcontrol of the Company or the Bank within the meaning of the Change in Bank Control Act (12U.S.C. § 1817(j)) and the Savings and Loan Holding Company Act (12 U.S.C. §1467a *ff)*, and anysuccessor sections and the applicable regulations thereunder; (2) an event that would be required tobe reported in response to Item 1 of the current report on Form 8-K, as in effect on theCommencement Date, pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 (the"Exchange Act"); (3) any person (as the term is used in Sections 13(d) and 14(d) of the ExchangeAct) is or becomes the beneficial owner (as defined in Rule 13d-3 under the Exchange Act) directlyor indirectly of securities of the Company or the Bank representing 25% or more of the combinedvoting power of the Company's or the Bank's outstanding securities; (4) individuals who aremembers of the Board of Directors on the Commencement Date (the "Incumbent Board") cease forany reason to constitute at least a majority thereof, provided that any person becoming a directorsubsequent to the Commencement Date whose election was approved by a vote of at least three-quarters of the directors comprising the Incumbent Board, or whose nomination for election by theCompany's stockholders was approved by a nominating committee serving under an IncumbentBoard, shall be considered a member of the Incumbent Board; or (5) approval by the Company'sstockholders of a plan of reorganization, merger or consolidation of the Company, sale of all orsubstantially all of the assets of the Company, a similar transaction in which the Company is not theresulting entity; provided that the term "change in control" shall not include an acquisition ofsecurities by an employee benefit plan of the Bank or the Company.  In the application of regulationsNEXT PAGE
under the Change in Bank Control Act or the Savings and Loan Holding Company Act,determinations to be made by the applicable federal banking regulator shall be made by the Board ofDirectors.
                        (b)  The term "Consolidated Subsidiaries" means any subsidiary or subsidiaries of theCompany (or its successors) that are part of the consolidated group of the Company (or itssuccessors) for federal income tax reporting.

                        (c)  The term "Date of Termination" means the date upon which the Employee'semployment with the Company or the Bank or both ceases, as specified in a notice of terminationpursuant to Section 8 of this Agreement.

                        (d)  The term "Involuntary Termination" means the termination of the employmentof the Employee (i) by either the Company or the Bank or both without his express written consent;or (ii) by the Employee by reason of a material diminution of or interference with his duties,responsibilities or benefits, including (without limitation) any of the following actions unlessconsented to in writing by the Employee: (1) a requirement that the Employee be based at any placeother than Lafayette, Indiana, or within 35 miles thereof, except for reasonable travel on Companyor Bank business; (2) a material demotion of the Employee; (3) a material reduction in the numberor seniority of personnel reporting to the Employee or a material reduction in the frequency withwhich, or in the nature of the matters with respect to which such personnel are to report to theEmployee, other than as part of a Bank- or Company-wide reduction in staff; (4) a reduction in theEmployee's salary or a material adverse change in the Employee's perquisites, benefits, contingentbenefits or vacation, other than prior to a Change in Control as part of an overall program applieduniformly and with equitable effect to all members of the senior management of the Bank or theCompany; (5) a material permanent increase in the required hours of work or the workload of theEmployee; or (6) the failure of the Board of Directors (or a board of directors of a successor of theCompany) to elect him as President and Chief Executive Officer of the Company (or a successor ofthe Company) or any action by the Board of Directors (or a board of directors of a successor of theCompany) removing him from any of such offices, or the failure of the board of directors of the Bank(or any successor of the Bank) to elect him as President and Chief Executive Officer of the Bank (orany successor of the Bank) or any action by such board (or board of a successor of the Bank)removing him from any of such offices.  The term "Involuntary Termination" does not includeTermination for Cause or termination of employment due to retirement, death, disability orsuspension or temporary or permanent prohibition from participation in the conduct of the Bank'saffairs under Section 8 of the Federal Deposit Insurance Act ("FDIA").

                        (e)  The terms "Termination for Cause" and "Terminated for Cause" mean terminationof the employment of the Employee with either the Company or the Bank, as the case may be,because of the Employee's dishonesty, incompetence, willful misconduct, breach of a fiduciary dutyinvolving personal profit, intentional failure to perform stated duties, willful violation of any law, rule,or regulation (excluding traffic violations or similar offenses) or final cease-and-desist order, ormaterial breach of any provision of this Agreement.  No act or failure to act by the Employee shallbe considered willful unless the Employee acted or failed to act with an absence of good faith andwithout a reasonable belief that his action or failure to act was in the best interest of the Company.The Employee shall not be deemed to have been Terminated for Cause unless and until there shall2NEXT PAGE
have been delivered to the Employee a copy of a resolution, duly adopted by the affirmative vote ofnot less than a majority of the entire membership of the Board of Directors at a meeting of the Boardduly called and held for such purpose (after reasonable notice to the Employee and an opportunityfor the Employee, together with the Employee's counsel, to be heard before the Board), stating thatin the good faith opinion of the Board of Directors the Employee has engaged in conduct describedin the preceding sentence and specifying the particulars thereof in detail.  The opportunity of theEmployee to be heard before the Board shall not affect the right of the Employee to arbitration as setforth in paragraph 19.
            2.  Term.  The initial term of this Agreement shall be for the period commencing on theCommencement Date and terminating on December 31, 2002, subject to earlier termination asprovided herein.  Beginning on December 31, 2002, and on each anniversary thereafter, the term ofthis Agreement shall be extended for a period of one year, provided that the Company has not givennotice to the Employee in writing at least 90 days prior to such anniversary that the term of thisAgreement shall not be extended further, and provided further that the Employee has not receivedan unsatisfactory performance review by either the Board of Directors or the board of directors ofthe Bank.

            3.  Employment.  The Employee is employed as the President of the Company and the Bankeffective as of the Commencement Date and as the Chief Executive Officer of the Company and theBank effective as January 1, 2002.  As such, the Employee shall render administrative andmanagement services as are customarily performed by persons situated in similar executive capacities,and shall have such other powers and duties as the Board of Directors 7 or the board of directors ofthe Bank may prescribe from time to time.  The Employee shall also render services to any subsidiaryor subsidiaries of the Company or the Bank as requested by the Company or the Bank from time totime consistent with his executive position.  The Employee shall devote his best efforts and full timeand attention to the business and affairs of the Company and the Bank to the extent necessary todischarge his responsibilities hereunder.  The Employee may (i) serve on corporate or charitableboards or committees, and (ii) manage personal investments, so long as such activities do not interferematerially with performance of his responsibilities hereunder. 

            4.  Compensation.

                        (a)  Salary.  The Company agrees to pay the Employee during the term of thisAgreement an annualized base salary of at least $160,000 per year (the "Company Salary"); providedthat any amounts of salary actually paid to the Employee by any Consolidated Subsidiaries shallreduce the amount to be paid by the Company to the Employee.  The Company Salary shall be paidno less frequently than monthly and shall be subject to customary tax withholding.  The amount ofthe Employee's Company Salary shall be increased (but shall not be decreased) from time to time inaccordance with the amounts of salary approved by the Board of Directors or the board of directorsof any of the Consolidated Subsidiaries after the Commencement Date. Adjustments in salary or othercompensation shall not limit or reduce any other obligation of the Company under this Agreement.

                        (b)  Discretionary Bonuses.  The Employee shall be entitled to participate in anequitable manner with all other executive officers of the Company and the Bank in such performance-based and discretionary bonuses, if any, as are authorized and declared by the Board of Directors for3NEXT PAGE
executive officers of the Company and by the board of directors of the Bank for executive officersof the Bank.
                        (c)  Grant of Stock Options and Restricted Stock.  On the Commencement Date, thecompensation committee of the Company shall grant to the Employee, pursuant to and in accordancewith the terms of the Company's stock option and incentive plan and recognition and retention plan,the following: (i) an incentive stock option to purchase 10,000 shares of Company common stock and(ii) 10,000 restricted shares of Company common stock.  Each of these awards shall vest in five equalannual installments, subject to the Employee's continuous employment with the Company, with thefirst installment vesting on the first anniversary of the Commencement Date, and shall otherwise begranted on the terms and conditions consistent with the Company's practice in making grants tosimilarly situated executives.

                        (d)  Expenses.  The Employee shall be entitled to receive prompt reimbursement forall reasonable expenses incurred by the Employee in performing services under this Agreement inaccordance with the policies and procedures applicable to the executive officers of the Company andthe Bank, provided that the Employee accounts for such expenses as required under such policies andprocedures.

                        (e)  Deferral of Non-Deductible Compensation. In the event that the Employee'saggregate compensation (including compensatory benefits which are deemed remuneration forpurposes of Section 162(m) of the Internal Revenue Code of 1986 as amended (the "Code")) fromthe Company and the Consolidated Subsidiaries for any calendar year exceeds the greater of (i)$1,000,000 or (ii) the maximum amount of compensation deductible by the Company or any of theConsolidated Subsidiaries in any calendar year under Section 162(m) of the Code (the "maximumallowable amount"), then any such amount in excess of the maximum allowable amount shall bemandatorily deferred with interest thereon at 8% per annum, compounded annually, to a calendar yearsuch that the amount to be paid to the Employee in such calendar year, including deferred amountsand interest thereon, does not exceed the maximum allowable amount.  Subject to the foregoing,deferred amounts including interest thereon shall be payable at the earliest time permissible.  Allunpaid deferred amounts shall be paid to the Employee not later than his Date of Termination unlesshis Date of Termination is on a December 31st, in which case, the unpaid deferred amounts shall bepaid to the Employee on the first business day of the next succeeding calendar year.  The provisionsof this subsection shall survive any termination of the Employee's employment and any terminationof this Agreement.

            5.  Benefits.

                        (a)  Participation in Benefit Plans.  The Employee shall be entitled to participate, tothe same extent as executive officers of the Company and the Bank generally, in all plans of theCompany and the Bank relating to pension, retirement, thrift, profit-sharing, savings, group or otherlife insurance, hospitalization, medical and dental coverage, travel and accident insurance, education,cash bonuses, and other retirement or employee benefits or combinations thereof.  In addition, theEmployee shall be entitled to be considered for benefits under all of the stock and stock option relatedplans in which the Company's or the Bank's executive officers are eligible or become eligible toparticipate. 
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                        (b)  Fringe Benefits.  The Employee shall be eligible to participate in, and receivebenefits under, any other fringe benefit plans or perquisites which are or may become generallyavailable to the Company's or the Bank's executive officers, including but not limited to supplementalretirement, incentive compensation, supplemental medical or life insurance plans, company cars, clubdues, physical examinations, financial planning and tax preparation services.

                        (c)  Interest Payments on Third Party Loan.  The Company shall reimburse toEmployee the amount of any interest charges for a two year period on any loan to Employee froma non-affiliated lender in an aggregate of up to $30,000 in principal amount.  After this two yearperiod, all interest payments shall be the sole responsibility of Employee.  The Company shall not bean obligor or guarantor on any such loan and shall not be responsible for any principal payments, latecharges, loan fees or similar charges or costs on such loan.

                        (d)  Automobile.  The Company shall either purchase or lease an automobile of theCompany's choosing for the sole use of the Employee, at no cost to the Employee.

                        (e)  Country Club Dues.  The Company shall pay for the Employee any initiationfees, monthly dues and assessments, and any other business related charges at a local country club.

                        (f)  Salary and Benefits Provided by the Bank.  To the extent that the Bank payssalary and pays or provides other compensation and benefits of any kind provided for in thisAgreement, the Company's obligation do so under this Agreement shall be excused.

            6.  Vacations; Leave.  The Employee shall be entitled to annual paid vacation, in accordancewith the policies established by the Board of Directors and the board of directors of the Bank forexecutive officers, in no event less than 23 days per year, and to voluntary leaves of absence, with orwithout pay, from time to time at such times and upon such conditions as the Board of Directors maydetermine in its discretion.

            7.  Termination of Employment.  The Board of Directors may terminate the Employee'semployment at any time and such termination of employment, except in the case of Termination forCause, shall not prejudice the Employee's right to compensation or other benefits under thisAgreement.

                        (a)  Termination for Cause.  In the event of Termination for Cause, the Company shallpay the Employee the Employee's salary through the Date of Termination, and the Company shallhave no further obligation to the Employee under this Agreement.

                        (b)  Voluntary Termination.  The Employee's employment may be voluntarilyterminated by the Employee at any time upon 90 days' written notice to the Company or such shorterperiod as may be agreed upon between the Employee and the Board of Directors, for reasons otherthan reasons that constitute Involuntary Termination.  In the event of such voluntary termination, theBank shall be obligated to continue to pay to the Employee the Employee's salary and benefits onlythrough the Date of Termination, at the time such payments are due, and the Company shall have nofurther obligation to the Employee under this Agreement.
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                        (c)  Involuntary Termination Not Related to a Change in Control.  In the event theEmployee experiences an Involuntary Termination not related to a Change in Control, (1) theCompany shall pay to the Employee during the remaining term of this Agreement the Employee'ssalary at the rate in effect immediately prior to the Date of Termination, payable in such manner andat such times as such salary would have been payable to the Employee under Section 4(a) if theEmployee had continued to be employed by the Company, and (2) the Company shall provide to theEmployee during the remaining term of this Agreement health insurance benefits as maintained forthe benefit of its Senior Executives from time to time during the remaining term of the Agreementon substantially the same terms as would apply if he had continued to be employed.

                        (d)  Involuntary Termination Related to a Change in Control; Tax Gross Up.  In theevent the Employee experiences an Involuntary Termination at the time of, or within 12 monthsfollowing a Change In Control, the Company shall (1) pay to the Employee in a lump sum in cashwithin 25 business days after the Date of Termination an amount equal to 299% of the Employee's"base amount" as defined in Section 280G of the Internal Revenue Code of 1986, as amended (the"Code"); and (2) provide to the Employee during the remaining term of this Agreement, at no costto Employee, health benefits as are maintained for Senior Executives from time to time during theremaining term of this Agreement on substantially the same terms as would apply if he had continuedto be employed.

                        In the event that any payments or benefits provided or to be provided to theEmployee pursuant to this Agreement, in combination with payments or benefits, if any, from otherplans or arrangements maintained by the Company or any of the Consolidated Subsidiaries, constitute"excess parachute payments" under Section 280G of the Code that are subject to excise tax underSection 4999 of the Code, the Company shall pay to the Employee in cash an additional amount equalto the amount of the Gross Up Payment (as hereinafter defined).  The "Gross Up Payment" shall bethe amount needed to ensure that the amount of such payments and the value of such benefitsreceived by the Employee (net of such excise tax and any federal, state and local tax on theCompany's payment to him attributable to such excise tax) equals the amount of such payments andvalue of such benefits as he would receive in the absence of such excise tax and any federal, state andlocal tax on the Company's payment to him attributable to such excise tax.  The Company shall paythe Gross Up Payment within 30 days after the Date of Termination.  For purposes of determiningthe amount of the Gross Up Payment, the value of any non-cash benefits and deferred payments orbenefits shall be determined by the Company's independent auditors in accordance with the principlesof Section 280G(d)(3) and (4) of the Code.  In the event that, after the Gross Up Payment is made,the amount of the excise tax is determined to be less than the amount calculated in the determinationof the actual Gross Up Payment made by the Company, the Employee shall repay to the Company,at the time that such reduction in the amount of excise tax is finally determined, the portion of theGross Up Payment attributable to such reduction, plus interest on the amount of such repayment atthe applicable federal rate under Section 1274 of the Code from the date of the Gross Up Paymentto the date of the repayment.  The amount of the reduction of the Gross Up Payment shall reflect anysubsequent reduction in excise taxes resulting from such repayment.  In the event that, after the GrossUp Payment is made, the amount of the excise tax is determined to exceed the amount anticipatedat the time the Gross Up Payment was made, the Company shall pay to the Employee, in immediatelyavailable funds, at the time that such additional amount of excise tax is finally determined, anadditional payment ("Additional Gross Up Payment") equal to such additional amount of excise tax6NEXT PAGE
and any federal, state and local taxes thereon, plus all interest and penalties, if any, owed by theEmployee with respect to such additional amount of excise and other tax.  The Company shall havethe right to challenge, on the Employee's behalf, any excise tax assessment against him as to whichthe Employee is entitled to (or would be entitled if such assessment is finally determined to be proper)a Gross Up Payment or Additional Gross Up Payment, *provided that*all costs and expenses incurredin such a challenge shall be borne by the Company and the Company shall indemnify the Employeeand hold him harmless, on an after-tax basis, from any excise or other tax (including interest andpenalties with respect thereto) imposed as a result of such payment of costs and expenses by theCompany.
                        (e)  Death; Disability.  In the event of the death of the Employee while employed underthis Agreement and prior to any termination of employment, the Employee's estate, or such personas the Employee may have previously designated in writing, shall be entitled to receive from theCompany the salary of the Employee through the last day of the calendar month in which theEmployee died.  If the Employee becomes "permanently disabled" while employed under thisAgreement, the Board of Directors shall be entitled to terminate this Agreement and the employmentof the Employee at any time at its discretion.  For purposes of this Agreement, the term "permanentlydisabled" means that the Employee has a mental or physical infirmity which permanently impairs hisability to perform substantially his duties and responsibilities under this Agreement and which resultsin (i) eligibility of the Employee under the long-term disability plan of the Company or the Bank, ifany; or (ii) inability of the Employee to perform substantially his duties and responsibilities under thisAgreement for a period of 180 consecutive days.

                        (f)  Temporary Suspension or Prohibition.  If the Employee is suspended and/ortemporarily prohibited from participating in the conduct of the Bank's affairs by a notice served underSection 8(e)(3) or (g)(1) of the FDIA, 12 U.S.C. § 1818(e)(3) and (g)(1), the Company's obligationsunder this Agreement shall be suspended as of the date of service, unless stayed by appropriateproceedings.  If the charges in the notice are dismissed, the Company may in its discretion (i) pay theEmployee all or part of the compensation withheld while its obligations under this Agreement weresuspended and (ii) reinstate in whole or in part any of its obligations which were suspended.

                        (g)  Permanent Suspension or Prohibition.  If the Employee is removed and/orpermanently prohibited from participating in the conduct of the Bank's affairs by an order issuedunder Section 8(e)(4) or (g)(1) of the FDIA, 12 U.S.C. § 1818(e)(4) and (g)(1), all obligations of theCompany under this Agreement shall terminate as of the effective date of the order, but vested rightsof the contracting parties shall not be affected.

                        (h)  Default of the Bank.  If the Bank is in default (as defined in Section 3(x)(1) of theFDIA), all obligations of the Company under this Agreement shall terminate as of the date of default,but this provision shall not affect any vested rights of the contracting parties.
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                        (i)  Termination by Regulators.  All obligations of the Company under this Agreementshall be terminated, except to the extent determined that continuation of this Agreement is necessaryfor the continued operation of the Bank:  (i) by the Director of the Office of Thrift Supervision (the"Director") or his or her designee, at the time the Federal Deposit Insurance Corporation enters intoan agreement to provide assistance to or on behalf of the Bank under the authority contained inSection 13(c) of the FDIA; or (ii) by the Director or his or her designee, at the time the Director orhis or her designee approves a supervisory merger to resolve problems related to operation of theBank or when the Bank is determined by the Director to be in an unsafe or unsound condition.  Anyrights of the parties that have already vested, however, shall not be affected by any such action.

            8.  Notice of Termination.  In the event that the Company or the Bank, or both, desire toterminate the employment of the Employee during the term of this Agreement, the Company or theBank, or both, shall deliver to the Employee a written notice of termination, stating whether suchtermination constitutes Termination for Cause or Involuntary Termination, setting forth in reasonabledetail the facts and circumstances that are the basis for the termination, and specifying the date uponwhich employment shall terminate, which date shall be at least 30 days after the date upon which thenotice is delivered, except in the case of Termination for Cause.  In the event that the Employeedetermines in good faith that he has experienced an Involuntary Termination of his employment, heshall send a written notice to the Company stating the circumstances that constitute such involuntarytermination and the date upon which his employment shall have ceased due to such InvoluntaryTermination.  In the event that the Employee desires to effect a voluntary termination as describedin Section 7(b) above, he shall deliver a written notice to the Company, stating the date upon whichemployment shall terminate, which date shall be at least 30 days after the date upon which the noticeis delivered, unless the parties agree to a date sooner.  

            9.  No Mitigation.  The Employee shall not be required to mitigate the amount of any salaryor other payment or benefit provided for in this Agreement by seeking other employment orotherwise, nor shall the amount of any payment or benefit provided for in this Agreement be reducedby any compensation earned by the Employee as the result of employment by another employer, byretirement benefits after the Date of Termination or otherwise.

            10.  Attorneys Fees.  The Company shall pay all legal fees and related expenses (including thecosts of experts, evidence and counsel) incurred by the Employee as a result of (i) the Employee'scontesting or disputing any termination of employment, or (ii) the Employee's seeking to obtain orenforce any right or benefit provided by this Agreement or by any other plan or arrangementmaintained by the Company (or its successors) or the Consolidated Subsidiaries under which theEmployee is or may be entitled to receive benefits; provided that the Company's obligation to paysuch fees and expenses is subject to the Employee's prevailing with respect to the matters in disputein any action initiated by the Employee or the Employee's having been determined to have actedreasonably and in good faith with respect to any action initiated by the Company or the Bank.

            11.  Directorship.  The Company has agreed to adopt a resolution to increase the size of theBoard of Directors from 10 members to 11 members and to appoint the Employee to the Board ofDirectors of the Company, effective as of the Commencement Date, for a term expiring at the annualmeeting of stockholders in 2003. The Board of Directors shall also take such actions necessary tocause the Employee to be appointed to the board of directors of the Bank, as soon as practicable after8NEXT PAGE
the Commencement Date, for a term coinciding with the Employee's term on the Board of Directorsof the Company.
            12.  Non-Disclosure and Non-Solicitation.  

                        (a)  Non-Disclosure.  The Employee acknowledges that he has acquired, and willcontinue to acquire while employed by the Company and/or any Consolidated Subsidiary, specialknowledge of the business, affairs, strategies and plans of the Company and the ConsolidatedSubsidiaries which has not been disclosed to the public and which constitutes confidential andproprietary business information owned by the Company and the Consolidated Subsidiaries, includingbut not limited to, information about the customers, customer lists, software, data, formulae,processes, inventions, trade secrets, marketing information and plans, and business strategies of theCompany and the Consolidated Subsidiaries, and other information about the products and servicesoffered or developed or planned to be offered or developed by the Company and/or the ConsolidatedSubsidiaries ("Confidential Information").  The Employee agrees that, without the prior writtenconsent of the Company, he shall not, during the term of his employment or at any time thereafter,in any manner directly or indirectly disclose any Confidential Information to any person or entity otherthan the Company and the Consolidated Subsidiaries.  Notwithstanding the foregoing, if theEmployee is requested or required (including but not limited to by oral questions, interrogatories,requests for information or documents in legal proceeding, subpoena, civil investigative demand orother similar process) to disclose any Confidential Information the Employee shall provide theCompany with prompt written notice of any such request or requirement so that the Company and/ora Consolidated Subsidiary may seek a protective order or other appropriate remedy and/or waivecompliance with the provisions of this Section 12(a). If, in the absence of a protective order or otherremedy or the receipt of a waiver from the Company, the Employee is nonetheless legally compelledto disclose Confidential Information to any tribunal or else stand liable for contempt or suffer othercensure or penalty, the Employee may, without liability hereunder, disclose to such tribunal only thatportion of the Confidential Information which is legally required to be disclosed, provided that theEmployee exercise his best efforts to preserve the confidentiality of the Confidential Information,including without limitation by cooperating with the Company and/or a Consolidated Subsidiary toobtain an appropriate protective order or other reliable assurance that confidential treatment will beaccorded the Confidential Information by such tribunal.  On the Date of Termination, the Employeeshall promptly deliver to the Company all copies of documents or other records (including withoutlimitation electronic records) containing any Confidential Information that is in his possession orunder his control, and shall retain no written or electronic record of any Confidential Information. 

                        (b)  Non-Solicitation.  During the three year period next following the Date ofTermination, the Employee shall not directly or indirectly solicit, encourage, or induce any personwhile employed by the Company or any Consolidated Subsidiary to (i) leave the Company or anyConsolidated Subsidiary, (ii) cease his or her employment with the Company or any ConsolidatedSubsidiary or (iii) accept employment with another entity or person. 

            The provisions of this Section 12 shall survive any termination of the Employee's employmentand any termination of this Agreement.
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            13.  No Assignments.

                        (a)  This Agreement is personal to each of the parties hereto, and neither party mayassign or delegate any of its rights or obligations hereunder without first obtaining the written consentof the other party; provided, however, that the Company shall require any successor or assign(whether direct or indirect, by purchase, merger, consolidation or otherwise) by an assumptionagreement in form and substance satisfactory to the Employee, to expressly assume and agree toperform this Agreement in the same manner and to the same extent that the Company would berequired to perform it if no such succession or assignment had taken place.  Failure of the Companyto obtain such an assumption agreement prior to the effectiveness of any such succession orassignment shall be a breach of this Agreement and shall entitle the Employee to compensation andbenefits from the Company in the same amount and on the same terms as provided for an InvoluntaryTermination under Section 7 hereof.  For purposes of implementing the provisions of this Section13(a), the date on which any such succession becomes effective shall be deemed the Date ofTermination.

                        (b)  This Agreement and all rights of the Employee hereunder shall inure to the benefitof and be enforceable by the Employee's personal and legal representatives, executors, administrators,successors, heirs, distributees, devisees and legatees.  

            14.  Notice.  For the purposes of this Agreement, notices and all other communicationsprovided for in this Agreement shall be in writing and shall be deemed to have been duly given whenpersonally delivered or sent by certified mail, return receipt requested, postage prepaid, to theCompany at its home office, to the attention of the Board of Directors with a copy to the Secretaryof the Company, or, if to the Employee, to such home or other address as the Employee has mostrecently provided in writing to the Company.

            15.  Amendments.  No amendments or additions to this Agreement shall be binding unless inwriting and signed by both parties, except as herein otherwise provided.  

            16.  Headings.  The headings used in this Agreement are included solely for convenience andshall not affect, or be used in connection with, the interpretation of this Agreement.

            17.  Severability. The provisions of this Agreement shall be deemed severable and theinvalidity or unenforceability of any provision shall not affect the validity or enforceability of the otherprovisions hereof.

            18.  Governing Law. This Agreement shall be governed by the laws of the State of Indiana.

            19.  Arbitration.  Any dispute or controversy arising under or in connection with thisAgreement (other than relating to the enforcement of the provisions of Section 12) shall be settledexclusively by arbitration in accordance with the rules of the American Arbitration Association thenin effect.  Judgment may be entered on the arbitrator's award in any court having jurisdiction.
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            20.  Equitable and Other Judicial Relief.  In the event of an actual or threatened breach bythe Employee of any of the provisions of Section 12, the Company shall be entitled to equitable reliefin the form of an injunction from a court of competent jurisdiction and such other equitable and legalrelief as such court deems appropriate under the circumstances.  The parties agree that the Companyshall not be required to post any bond in connection with the grant or issuance of an injunction(preliminary, temporary and/or permanent) by a court of competent jurisdiction, and if a bond isnevertheless required, the parties agree that it shall be in a nominal amount.  The parties further agreethat in the event of a breach by the Employee of any of the provisions of Section 12, the Companywill suffer irreparable damage and its remedy at law against the Employee is inadequate tocompensate it for such damage.

            IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and yearfirst above written.

            THIS AGREEMENT CONTAINS A BINDING ARBITRATION PROVISION WHICHMAY BE ENFORCED BY THE PARTIES.	 
Attest:/s/ Mary Jo David                                       SecretaryLSB FINANCIAL CORP./s/ Mariellen M. Neudeck                      By:   Mariellen M. NeudeckIts:    Chairman of the BoardEMPLOYEE/s/ Randolph F. Williams                       Randolph F. Williams