Document:

LAWRENCE FEDERAL SAVINGS BANK
                              EMPLOYMENT AGREEMENT

         This AGREEMENT ("Agreement") is made effective as of December 28, 2000,
by and among Lawrence Federal Savings Bank (the "Bank"),  a federally  chartered
stock savings bank, with its principal  administrative office at 311 South Fifth
Street,  Ironton,  Ohio  45638-1609,   Lawrence  Financial  Holdings,   Inc.,  a
corporation  organized  under the laws of the  State of  Maryland,  the  holding
company for the Bank (the "Holding Company"), and Jack L. Blair ("Executive").

         WHEREAS, the Bank wishes to assure itself of the services of Executive
for the period provided in this Agreement; and

         WHEREAS,  Executive  is willing to serve in the employ of the Bank on a
full-time basis for said period.

         NOW,  THEREFORE,  in  consideration  of  the  mutual  covenants  herein
contained,  and upon the other terms and conditions  hereinafter  provided,  the
parties hereby agree as follows:

1. POSITION AND RESPONSIBILITIES.

         During  the period of  Executive's  employment  under  this  Agreement,
Executive shall serve as President and Chief  Executive  Officer of the Bank. As
such, Executive shall report directly to the Board of Directors of the Bank (the
"Board"),  be elected to the Board upon  expiration  of each term thereon  while
this Agreement remains in effect, and be generally responsible for selection and
supervision of the Bank's  personnel and for the formulation of its business and
personnel  policies,  rendering  executive,  policy-making  and other management
services  of the type  customarily  performed  by  persons  serving  in  similar
capacities  at  other   institutions,   together  with  such  other  duties  and
responsibilities  as may be appropriate  to  Executive's  position and as may be
from time to time  determined by the Board to be necessary to the  operations of
the Bank and in accordance with its by-laws.

2. TERMS AND DUTIES.

         (a) The period of Executive's  employment under this Agreement shall be
deemed to have  commenced as of the date first above written and shall  continue
for a period of thirty-six (36) full calendar months  thereafter.  Commencing on
the first anniversary date of this Agreement, and continuing on each anniversary
thereafter,  the disinterested  members of the Board may extend the Agreement an
additional  year  such  that  the  remaining  term  of the  Agreement  shall  be
thirty-six  (36) months unless  Executive  elects not to extend the term of this
Agreement  by  giving  written  notice  in  accordance  with  Section  8 of this
Agreement.  The Board will  review the  Agreement  and  Executive's  performance
annually for purposes of  determining  whether to extend the  Agreement  and the
rationale  and results  thereof  shall be included in the minutes of the Board's
meeting. The Board shall give notice to Executive as soon as possible after such
review as to whether the Agreement is to be extended.

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         (b) During the period of Executive's  employment hereunder,  except for
periods of absence  occasioned  by illness,  reasonable  vacation  periods,  and
reasonable  leaves of absence,  Executive  shall  devote  substantially  all his
business time, attention,  skill, and efforts to the faithful performance of his
duties hereunder including  activities and services related to the organization,
operation and  management of the Bank and  participation  in community and civic
organizations;  provided,  however,  that,  with the  approval of the Board,  as
evidenced by a resolution of such Board, from time to time, Executive may serve,
or continue to serve,  on the boards of directors of, and hold any other offices
or positions in, companies or  organizations,  which, in such Board's  judgment,
will not present any conflict of interest with the Bank,  or  materially  affect
the performance of Executive's duties pursuant to this Agreement.

         (c)  Notwithstanding  anything  herein  to  the  contrary,  Executive's
employment  with the Bank may be terminated by the Bank or the Executive  during
the  term of  this  Agreement,  subject  to the  terms  and  conditions  of this
Agreement.

3. COMPENSATION AND REIMBURSEMENT.

         (a) The Bank shall pay  Executive as  compensation  a salary of $98,400
per year ("Base Salary").  Base Salary shall include any amounts of compensation
deferred by Executive under any tax-qualified retirement or welfare benefit plan
or any other deferred compensation arrangement maintained by the Bank. Such Base
Salary shall be payable in accordance with the regular payroll  practices of the
Bank.  During the period of this  Agreement,  Executive's  Base Salary  shall be
reviewed at least annually; the first such review will be made no later than one
year from the date of this  Agreement.  Such review  shall be  conducted  by the
Board or by a  Committee  of the Board,  delegated  such  responsibility  by the
Board.  The Committee or the Board may increase  Executive's  Base Salary at any
time.  Any increase in Base Salary  shall  become "Base  Salary" for purposes of
this  Agreement.  In addition to Base Salary  provided in this Section 3(a), the
Bank shall also provide  Executive,  at no premium cost to  Executive,  with all
such other benefits as are provided uniformly to permanent  full-time  employees
of the Bank. In addition,  Executive shall be entitled to incentive compensation
and  bonuses  as  provided  in any  plan or  arrangement  of the  Bank in  which
Executive is eligible to participate.

         (b) Executive shall be entitled to participate in any employee  benefit
plans,  arrangements and perquisites  substantially equivalent to those in which
Executive was participating or otherwise deriving benefit from immediately prior
to the beginning of the term of this Agreement,  and the Bank will not,  without
Executive's prior written consent, make any changes in such plans,  arrangements
or perquisites  which would materially  adversely affect  Executive's  rights or
benefits  thereunder;  except to the extent such changes are made  applicable to
all  Bank  employees  on a  non-  discriminatory  basis.  Without  limiting  the
generality of the foregoing  provisions of this Subsection (b),  Executive shall
be entitled to  participate  in or receive  benefits under all plans relating to
stock  options,  restricted  stock awards,  stock  purchases,  pension,  thrift,
supplemental retirement,  profit-sharing,  employee stock ownership,  group life
insurance,  medical and other health and welfare  coverage,  education,  cash or
stock bonuses that are now or hereafter made available by the Bank to its senior
executives and key management  employees,  subject to and on a basis  consistent
with the

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terms,  conditions and overall  administration  of such plans and  arrangements.
Nothing paid to Executive  under any such plan or arrangement  will be deemed to
be in lieu of other  compensation  to which  Executive  is  entitled  under this
Agreement.

         (c) The  Bank  shall  pay or  reimburse  Executive  for all  reasonable
expenses  incurred by Executive  performing his obligations under this Agreement
in  accordance  with  policies  and  procedures  no more  favorable  than  those
applicable  to  other  executive  personnel  and  may  provide  such  additional
compensation  in such form and such  amounts  as the Board may from time to time
determine.

4. PAYMENTS TO EXECUTIVE UPON AN EVENT OF TERMINATION.

         (a) Upon the occurrence of an Event of Termination  (as herein defined)
during  Executive's term of employment  under this Agreement,  the provisions of
this Section shall apply. As used in this  Agreement,  an "Event of Termination"
shall mean and include any one or more of the following:  (i) the termination by
the Bank of Executive's full-time employment hereunder for any reason other than
a termination  governed by Section 5(a) hereof,  or  Termination  for Cause,  as
defined in Section 7 hereof; (ii) Executive's resignation from the Bank's employ
upon  any  (A)   material   change   in   Executive's   function,   duties,   or
responsibilities, which change would cause Executive's position to become one of
lesser  responsibility,  importance,  or scope from the position and  attributes
thereof  described  in  Section  1 of this  Agreement,  unless  consented  to by
Executive,  (B) relocation of Executive's  principal place of employment by more
than 30 miles from its location at the effective date of this Agreement,  unless
consented  to  by  Executive,   (C)  material  reduction  in  the  benefits  and
perquisites  to Executive  from those being provided as of the effective date of
this  Agreement,  unless  consented  to  by  Executive,  (D)  a  liquidation  or
dissolution of the Bank or Holding  Company,  or (E) breach of this Agreement by
the Bank.  Upon the occurrence of any event  described in clauses (A), (B), (C),
(D),  or (E) above,  Executive  shall have the right to elect to  terminate  his
employment  under this  Agreement by  resignation  upon not less than sixty (60)
days prior  written  notice  given within six full months after the event giving
rise to said right to elect.

         (b) Upon the  occurrence  of an  Event of  Termination,  on the Date of
Termination,  as  defined  in  Section  8, the Bank  shall be  obligated  to pay
Executive,  or,  in the  event  of his  subsequent  death,  his  beneficiary  or
beneficiaries,  or his estate, as the case may be a sum equal to the sum of: (i)
Base Salary and bonuses in accordance  with Section 3(a) of this  Agreement that
would have been paid to Executive for the remaining  term of this  Agreement had
the Event of Termination not occurred;  and (ii) all benefits,  including health
insurance  in  accordance  with  Section  3(b) that would have been  provided to
Executive for the remaining  term of this  Agreement had an Event of Termination
not occurred;  provided,  however, that any payments pursuant to this subsection
and  subsection  4(c) below  shall not,  in the  aggregate,  exceed  three times
Executive's  average annual  compensation for the five most recent taxable years
that  Executive  has been employed by the Bank or such lesser number of years in
the event that Executive shall have been employed by the Bank for less than five
years.  In the  event the Bank is not in  compliance  with its  minimum  capital
requirements or if such payments pursuant to this subsection (b) would cause the
Bank's capital to be reduced below its minimum regulatory capital  requirements,
such payments shall be deferred until

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such time as the Bank or  successor  thereto  is in capital  compliance.  At the
election  of  Executive,  which  election  is to be made  prior  to an  Event of
Termination, such payments shall be made in a lump sum as of Executive's Date of
Termination. In the event that no election is made, payment to Executive will be
made on a monthly basis in approximately equal installments during the remaining
term of the Agreement. Such payments shall not be reduced in the event Executive
obtains other employment following termination of employment.

         (c) Upon the occurrence of an Event of Termination, the Bank will cause
to be continued  life,  medical,  dental and disability  coverage  substantially
identical  to the  coverage  maintained  by the Bank or the Holding  Company for
Executive  prior to his  termination at no premium cost to Executive,  except to
the  extent  such  coverage  may be changed  in its  application  to all Bank or
Holding Company employees.  Such coverage shall cease upon the expiration of the
remaining term of this Agreement.

5. CHANGE IN CONTROL.

         (a) For purposes of this  Agreement,  a "Change in Control" of the Bank
or Holding  Company shall mean an event of a nature that:  (i) would be required
to be reported  in  response to Item 1 of the current  report on Form 8-K, as in
effect on the date  hereof,  pursuant  to Section 13 or 15(d) of the  Securities
Exchange Act of 1934,  as amended  (the  "Exchange  Act");  or (ii) results in a
Change in Control of the Bank or the Holding  Company  within the meaning of the
Home Owners' Loan Act of 1933, as amended, the Federal Deposit Insurance Act and
the Rules  and  Regulations  promulgated  by the  Office  of Thrift  Supervision
("OTS") (or its  predecessor  agency),  as in effect on the date hereof or (iii)
without  limitation such a Change in Control shall be deemed to have occurred at
such time as (A) any "person"  (as the term is used in Sections  13(d) and 14(d)
of the Exchange  Act) is or becomes the  "beneficial  owner" (as defined in Rule
13d-3 under the Exchange Act),  directly or indirectly,  of voting securities of
the Bank or the Holding  Company  representing  25% or more of the Bank's or the
Holding  Company's  outstanding  voting  securities  or  right to  acquire  such
securities except for any voting securities of the Bank purchased by the Holding
Company and any voting securities  purchased by any employee benefit plan of the
Bank or the Holding Company,  or (B) individuals who constitute the Board on the
date hereof (the "Incumbent  Board") cease for any reason to constitute at least
a majority thereof,  provided that any person becoming a director  subsequent to
the date hereof 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 the  Holding  Company's  stockholders  was  approved  by  the  same
Nominating Committee serving under an Incumbent Board, shall be, for purposes of
this clause (B),  considered as though he were a member of the Incumbent  Board,
or  (C) a  plan  of  reorganization,  merger,  consolidation,  sale  of  all  or
substantially  all the  assets of the Bank or the  Holding  Company  or  similar
transaction  occurs in which the Bank or Holding  Company  is not the  resulting
entity;  provided,  however,  that such an event  listed above will be deemed to
have  occurred  or to have been  effectuated  upon the  receipt of all  required
regulatory approvals not including the lapse of any statutory waiting periods.

         (b) If a Change in Control has occurred pursuant to Section 5(a) or the
Board has determined  that a Change in Control has occurred,  Executive shall be
entitled to the benefits

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provided  in  paragraphs  (c) and  (d) of this  Section  5 upon  his  subsequent
termination  of employment at any time during the term of this Agreement due to:
(1) Executive's  dismissal or (2) Executive's  voluntary  resignation during the
twelve (12) month period  following the date of the Change in Control  following
any  material  demotion,  loss of title,  office  or  significant  authority  or
responsibility,  material  reduction  in  annual  compensation  or  benefits  or
relocation of his  principal  place of employment by more than 30 miles from its
location immediately prior to the Change in Control,  unless such termination is
because of his death, disability, retirement or termination for Cause.

         (c) Upon Executive's  entitlement to benefits pursuant to Section 5(b),
the Bank  shall pay  Executive,  or in the event of his  subsequent  death,  his
beneficiary or beneficiaries,  or his estate, as the case may be, a sum equal to
the greater of: (1) Base Salary and bonuses in  accordance  with Section 3(a) of
this  Agreement that would have been paid to Executive for the remaining term of
this  Agreement had the event  described in Subsection (b) of this Section 5 not
occurred and all  benefits,  including  health  insurance,  in  accordance  with
Section 3(b) that would have been provided to Executive  for the remaining  term
of this  Agreement had the event  described in Subsection  (b) of this Section 5
not occurred; or (2) three (3) times Executive's Average Annual Compensation (as
defined  herein) for the five (5) most recent  taxable years that  Executive has
been  employed  by the Bank or such  lesser  number of years in the  event  that
Executive  shall  have been  employed  by the Bank for less than five (5) years.
Such "Average Annual  Compensation" shall include all taxable income paid by the
Bank,  including but not limited to, Base Salary,  commissions,  and bonuses, as
well as contributions on Executive's behalf to any pension and/or profit sharing
plan, retirement payments,  directors or committee fees and fringe benefits paid
or to be paid to  Executive  in any such year and payment of any  expense  items
without  accountability  or  business  purpose or that do not meet the  Internal
Revenue Service requirements for deductibility by the Bank;  provided,  however,
that any payment under this provision and subsection 5(d) below shall not exceed
three (3) times Executive's Average Annual  Compensation.  In the event the Bank
is not in compliance with its minimum  capital  requirements or if such payments
would  cause the  Bank's  capital  to be reduced  below its  minimum  regulatory
capital  requirements,  such payments  shall be deferred  until such time as the
Bank  or  successor  thereto  is in  capital  compliance.  At  the  election  of
Executive,  which  election  is to be made  prior to a Change in  Control,  such
payment shall be made in a lump sum as of Executive's  Date of  Termination.  In
the  event  that no  election  is made,  payment  to  Executive  will be made in
approximately  equal installments on a monthly basis over a period of thirty-six
(36)  months  following  Executive's  termination.  Such  payments  shall not be
reduced in the event Executive obtains other employment following termination of
employment.

         (d) Upon Executive's  entitlement to benefits pursuant to Section 5(b),
the Bank  will  cause to be  continued  life,  medical,  dental  and  disability
coverage  substantially  identical  to the coverage  maintained  by the Bank for
Executive prior to his severance at no premium cost to Executive,  except to the
extent  that  such  coverage  may be  changed  in its  application  for all Bank
employees on a non- discriminatory basis. Such coverage and payments shall cease
upon the expiration of thirty-six (36) months following the Date of Termination.

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6. CHANGE OF CONTROL RELATED PROVISIONS

         Notwithstanding  the  provisions  of Section  5, in no event  shall the
aggregate  payments or benefits to be made or afforded to  Executive  under said
paragraphs (the "Termination Benefits") constitute an "excess parachute payment"
under  Section 280G of the Internal  Revenue  Code of 1986,  as amended,  or any
successor  thereto,  and in order to avoid such a result,  Termination  Benefits
will be reduced, if necessary,  to an amount (the "Non-Triggering  Amount"), the
value of which is one  dollar  ($1.00)  less than an  amount  equal to three (3)
times Executive's  "base amount",  as determined in accordance with said Section
280G.  The  allocation of the reduction  required  hereby among the  Termination
Benefits provided by Section 5 shall be determined by Executive.

7. TERMINATION FOR CAUSE.

         The term  "Termination  for Cause"  shall mean  termination  because of
Executive's personal dishonesty, incompetence, willful misconduct, any breach of
fiduciary duty involving personal profit,  intentional failure to perform stated
duties,  willful  violation of any law, rule or  regulation  (other than traffic
violations  or similar  offenses)  or final  cease-and-desist  order or material
breach  of any  provision  of this  Agreement.  Notwithstanding  the  foregoing,
Executive shall not be deemed to have been Terminated for Cause unless and until
there  shall have been  delivered  to him a Notice of  Termination  which  shall
include a copy of a resolution duly adopted by the affirmative  vote of not less
than a majority of the members of the Board at a meeting of the Board called and
held for that purpose (after  reasonable  notice to Executive and an opportunity
for him, together with counsel,  to be heard before the Board),  finding that in
the good faith opinion of the Board,  Executive was guilty of conduct justifying
Termination  for  Cause  and  specifying  the  particulars  thereof  in  detail.
Executive shall not have the right to receive compensation or other benefits for
any period after the Date of Termination for Cause.  During the period beginning
on the date of the Notice of Termination  for Cause pursuant to Section 8 hereof
through the Date of  Termination  for Cause,  stock options and related  limited
rights granted to Executive under any stock option plan shall not be exercisable
nor shall any unvested  awards granted to Executive under any stock benefit plan
of the Bank, the Holding Company or any subsidiary or affiliate  thereof,  vest.
At the Date of  Termination  for Cause,  such stock options and related  limited
rights  and any  unvested  awards  shall  become  null and void and shall not be
exercisable  by or  delivered  to  Executive  at any  time  subsequent  to  such
Termination for Cause.

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8. NOTICE.

         (a) Any  purported  termination  by the Bank or by  Executive  shall be
communicated by Notice of Termination to the other party hereto. For purposes of
this  Agreement,  a "Notice of  Termination"  shall mean a written  notice which
shall indicate the specific termination  provision in this Agreement relied upon
and shall set forth in reasonable detail the facts and circumstances  claimed to
provide a basis for termination of Executive's employment under the provision so
indicated.

         (b) "Date of  Termination"  shall mean the date specified in the Notice
of Termination (which, in the case of a Termination for Cause, shall not be less
than thirty (30) days from the date such Notice of Termination is given).

         (c) If,  within  thirty  (30) days after any Notice of  Termination  is
given,  the party receiving such Notice of Termination  notifies the other party
that a dispute exists concerning the termination,  the Date of Termination shall
be the date on which the dispute is finally determined, either by mutual written
agreement  of  the  parties,  by a  binding  arbitration  award,  or by a  final
judgment,  order or decree of a court of  competent  jurisdiction  (the time for
appeal  therefrom  having  expired  and no appeal  having been  perfected)  and,
provided further,  that the Date of Termination shall be extended by a notice of
dispute  only if such  notice is given in good faith and the party  giving  such
notice  pursues  the  resolution  of such  dispute  with  reasonable  diligence.
Notwithstanding  the  pendency of any such  dispute,  in the event  Executive is
terminated for reasons other than  Termination for Cause, the Bank will continue
to pay  Executive  his Base Salary in effect when the notice  giving rise to the
dispute  was given until the  earlier  of: 1) the  resolution  of the dispute in
accordance  with this  Agreement or 2) the  expiration of the remaining  term of
this Agreement as determined as of the Date of  Termination.  Amounts paid under
this Section are in addition to all other  amounts due under this  Agreement and
shall not be  offset  against  or  reduce  any  other  amounts  due  under  this
Agreement.

9. POST-TERMINATION OBLIGATIONS.

         All payments and benefits to Executive  under this  Agreement  shall be
subject  to  Executive's  compliance  with this  Section 9 for one (1) full year
after  the  earlier  of the  expiration  of this  Agreement  or  termination  of
Executive's  employment with the Bank.  Executive shall, upon reasonable notice,
furnish  such  information  and  assistance  to the  Bank as may  reasonably  be
required by the Bank in connection with any litigation in which it or any of its
subsidiaries or affiliates is, or may become, a party.

10. NON-COMPETITION AND NON-DISCLOSURE OF BANK BUSINESS.

         (a) Upon any termination of Executive's  employment  hereunder pursuant
to Section 4 hereof,  Executive agrees not to compete with the Bank for a period
of one (1) year following such  termination in any city, town or county in which
Executive's  normal business office is located and the Bank has an office or has
filed an application for regulatory approval to establish an office,  determined
as of the effective date of such termination,  except as agreed to pursuant to a
resolution

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duly adopted by the Board.  Executive  agrees that during such period and within
said cities, towns and counties, Executive shall not work for or advise, consult
or otherwise  serve with,  directly or  indirectly,  any entity  whose  business
materially competes with the depository, lending or other business activities of
the Bank. The parties hereto, recognizing that irreparable injury will result to
the Bank, its business and property in the event of  Executive's  breach of this
Subsection  10(a) agree that in the event of any such breach by  Executive,  the
Bank, will be entitled, in addition to any other remedies and damages available,
to an  injunction to restrain the  violation  hereof by  Executive,  Executive's
partners,  agents,  servants,  employees and all persons acting for or under the
direction of Executive. Nothing herein will be construed as prohibiting the Bank
from  pursuing  any  other  remedies  available  to the Bank for such  breach or
threatened breach, including the recovery of damages from Executive.

         (b) Executive  recognizes  and  acknowledges  that the knowledge of the
business activities and plans for business activities of the Bank and affiliates
thereof,  as it may exist from time to time,  is a valuable,  special and unique
asset of the business of the Bank.  Executive will not, during or after the term
of his  employment,  disclose  any  knowledge of the past,  present,  planned or
considered  business activities of the Bank or affiliates thereof to any person,
firm,  corporation,  or other  entity  for any  reason  or  purpose  whatsoever.
Notwithstanding the foregoing,  Executive may disclose any knowledge of banking,
financial and/or economic principles, concepts or ideas which are not solely and
exclusively derived from the business plans and activities of the Bank. Further,
Executive may disclose information regarding the business activities of the Bank
to the OTS and the Federal Deposit Insurance  Corporation ("FDIC") pursuant to a
formal  regulatory  request.  In the event of a breach or  threatened  breach by
Executive of the  provisions  of this  Section,  the Bank will be entitled to an
injunction  restraining  Executive  from  disclosing,  in whole or in part,  the
knowledge of the past, present, planned or considered business activities of the
Bank or affiliates thereof, or from rendering any services to any person,  firm,
corporation,  other entity to whom such knowledge, in whole or in part, has been
disclosed or is threatened to be disclosed.  Nothing herein will be construed as
prohibiting the Bank from pursuing any other remedies  available to the Bank for
such  breach or  threatened  breach,  including  the  recovery  of damages  from
Executive.

11. SOURCE OF PAYMENTS.

         (a) All  payments  provided in this  Agreement  shall be timely paid in
cash or check from the general funds of the Bank. The Holding Company,  however,
unconditionally guarantees payment and provision of all amounts and benefits due
hereunder to  Executive  and, if such amounts and benefits due from the Bank are
not timely paid or provided by the Bank, such amounts and benefits shall be paid
or provided by the Holding Company.

         (b) Notwithstanding any provision herein to the contrary, to the extent
that  payments  and  benefits,  as  provided by this  Agreement,  are paid to or
received by Executive  under the Employment  Agreement  dated December 28, 2000,
between  Executive  and the Holding  Company,  such  compensation  payments  and
benefits  paid by the Holding  Company will be  subtracted  from any amounts due
simultaneously to Executive under similar provisions of this Agreement. Payments
pursuant to this Agreement and the Holding Company  Agreement shall be allocated
in proportion

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to the services  rendered and time  expended on such  activities by Executive as
determined by the Holding Company and the Bank on a quarterly basis.

12. EFFECT ON PRIOR AGREEMENTS AND EXISTING BENEFITS PLANS.

         This Agreement  contains the entire  understanding  between the parties
hereto and supersedes  any prior  employment  agreement  between the Bank or any
predecessor  of the Bank and  Executive,  except that this  Agreement  shall not
affect or operate to reduce any benefit or compensation  inuring to Executive of
a kind elsewhere  provided.  No provision of this Agreement shall be interpreted
to mean that  Executive  is  subject  to  receiving  fewer  benefits  than those
available to him without reference to this Agreement.

13. NO ATTACHMENT.

         (a) Except as required by law, no right to receive  payments under this
Agreement  shall be  subject to  anticipation,  commutation,  alienation,  sale,
assignment,  encumbrance,  charge,  pledge, or  hypothecation,  or to execution,
attachment,  levy, or similar process or assignment by operation of law, and any
attempt,  voluntary  or  involuntary,  to affect any such action  shall be null,
void, and of no effect.

         (b) This Agreement  shall be binding upon, and inure to the benefit of,
Executive and the Bank and their respective successors and assigns.

14. MODIFICATION AND WAIVER.

         (a)  This  Agreement  may  not be  modified  or  amended  except  by an
instrument in writing signed by the parties hereto.

         (b) No term or condition of this Agreement shall be deemed to have been
waived, nor shall there be any estoppel against the enforcement of any provision
of this Agreement,  except by written  instrument of the party charged with such
waiver or estoppel.  No such written waiver shall be deemed a continuing  waiver
unless specifically  stated therein,  and each such waiver shall operate only as
to the specific  term or condition  waived and shall not  constitute a waiver of
such term or condition for the future as to any act other than that specifically
waived.

15. REQUIRED PROVISIONS.

         In the event any of the foregoing  provisions of this Section 15 are in
conflict with the terms of this Agreement, this Section 15 shall prevail.

         (a) The Bank may terminate Executive's  employment at any time, but any
termination by the Bank, other than  Termination for Cause,  shall not prejudice
Executive's  right to  compensation  or other  benefits  under  this  Agreement.
Executive shall not have the right to receive compensation or other benefits for
any period after Termination for Cause as defined in Section 7 hereinabove.

                                      - 9 -

<PAGE>

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

         (c)  If  Executive  is  removed  and/or  permanently   prohibited  from
participating  in the  conduct of the Bank's  affairs by an order  issued  under
Section  8(e)(4) or 8(g)(1) of the  Federal  Deposit  Insurance  Act,  12 U.S.C.
ss.1818(e)(4)  or (g)(1),  all obligations of the Bank under this contract shall
terminate  as of the  effective  date of the  order,  but  vested  rights of the
contracting parties shall not be affected.

         (d) If the Bank is in default  as  defined  in  Section  3(x)(1) of the
Federal Deposit  Insurance Act, 12 U.S.C.  ss.1813(x)(1)  all obligations of the
Bank under this  contract  shall  terminate as of the date of default,  but this
paragraph shall not affect any vested rights of the contracting parties.

         (e)  All   obligations  of  the  Bank  under  this  contract  shall  be
terminated, except to the extent determined that continuation of the contract is
necessary for the continued operation of the institution: (i) by the Director of
the OTS (or his designee), the FDIC or the Resolution Trust Corporation,  at the
time the FDIC enters into an agreement to provide  assistance to or on behalf of
the Bank under the authority  contained in Section 13(c) of the Federal  Deposit
Insurance Act, 12 U.S.C. ss.1823(c);  or (ii) by the Director of the OTS (or his
designee)  at the time the  Director (or his  designee)  approves a  supervisory
merger to resolve  problems  related to the  operations  of the Bank or when the
Bank is determined by the Director to be in an unsafe or unsound condition.  Any
rights of the parties that have already vested,  however,  shall not be affected
by such action.

         (f) Any  payments  made to  Executive  pursuant to this  Agreement,  or
otherwise,   are   subject  to  and   conditioned   upon   compliance   with  12
U.S.C.ss.1828(k)  and 12 C.F.R.  Section  545.121 and any rules and  regulations
promulgated thereunder.

16. REINSTATEMENT OF BENEFITS UNDER SECTION 15(b).

         In the event Executive is suspended and/or temporarily  prohibited from
participating  in the  conduct of the Bank's  affairs by a notice  described  in
Section  15(b) hereof (the  "Notice")  during the term of this  Agreement  and a
Change  in  Control,  as  defined  herein,  occurs,  the Bank  will  assume  its
obligation  to  pay  and  Executive  will  be  entitled  to  receive  all of the
termination  benefits  provided for under Section 5 of this  Agreement  upon the
Bank's receipt of a dismissal of charges in the Notice.

                                     - 10 -

<PAGE>

17. SEVERABILITY.

         If, for any reason, any provision of this Agreement, or any part of any
provision, is held invalid, such invalidity shall not affect any other provision
of this  Agreement or any part of such  provision not held so invalid,  and each
such other  provision and part thereof shall to the full extent  consistent with
law continue in full force and effect.

18. HEADINGS FOR REFERENCE ONLY.

         The headings of sections and paragraphs  herein are included solely for
convenience of reference and shall not control the meaning or  interpretation of
any of the provisions of this Agreement.

19. GOVERNING LAW.

         The  validity,  interpretation,  performance  and  enforcement  of this
Agreement shall be governed by the laws of the State of Ohio, without regards to
principles  of  conflicts  of law of this  state,  but  only to the  extent  not
superseded by federal law.

20. ARBITRATION.

         Any dispute or  controversy  arising under or in  connection  with this
Agreement shall be settled exclusively by arbitration,  conducted before a panel
of three  arbitrators  sitting in a location  selected by Executive within fifty
(50) miles from the location of the Bank,  in  accordance  with the rules of the
American Arbitration  Association then in effect. Judgment may be entered on the
arbitrator's award in any court having  jurisdiction;  provided,  however,  that
Executive shall be entitled to seek specific performance of his right to be paid
until the Date of Termination  during the pendency of any dispute or controversy
arising under or in connection with this Agreement.

         In the event any dispute or controversy  arising under or in connection
with  Executive's  termination  is  resolved in favor of  Executive,  whether by
judgment, arbitration or settlement,  Executive shall be entitled to the payment
of all  back-pay,  including  salary,  bonuses and any other cash  compensation,
fringe  benefits and any  compensation  and benefits  due  Executive  under this
Agreement.

21. PAYMENT OF COSTS AND LEGAL FEES.

         All  reasonable  costs and 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 if Executive is successful on the merits
pursuant to a legal judgment, arbitration or settlement.

                                     - 11 -

<PAGE>

22. INDEMNIFICATION.

         (a) The Bank shall provide  Executive  (including his heirs,  executors
and  administrators)  with coverage  under a standard  directors'  and officers'
liability insurance policy at its expense and shall indemnify Executive (and his
heirs,  executors and administrators) as permitted under federal law against all
expenses  and  liabilities  reasonably  incurred  by him in  connection  with or
arising out of any  action,  suit or  proceeding  in which he may be involved by
reason of his having been a director  or officer of the Bank  (whether or not he
continues to be a director or officer at the time of incurring  such expenses or
liabilities),  such expenses and liabilities to include,  but not be limited to,
judgments,   court  costs  and  attorneys'  fees  and  the  cost  of  reasonable
settlements.

         (b) Any payments made to Executive pursuant to this Section are subject
to and  conditioned  upon  compliance  with 12  U.S.C.ss.1828(k)  and 12  C.F.R.
Section 545.121 and any rules or regulations promulgated thereunder.

23. SUCCESSOR TO THE BANK

         The Bank shall  require any  successor or assignee,  whether  direct or
indirect,  by  purchase,   merger,   consolidation  or  otherwise,   to  all  or
substantially  all the  business or assets of the Bank or the  Holding  Company,
expressly  and  unconditionally  to  assume  and  agree to  perform  the  Bank's
obligations under this Agreement, in the same manner and to the same extent that
the Bank would be required to perform if no such  succession or  assignment  had
taken place.

                                     - 12 -

<PAGE>

                                   SIGNATURES

         IN  WITNESS  WHEREOF,   Lawrence  Federal  Savings  Bank  and  Lawrence
Financial  Holdings,  Inc.  have caused this  Agreement to be executed and their
seals to be affixed  hereunto by their duly  authorized  officers and directors,
and Executive has signed this Agreement, on the 28th day of December, 2000.

ATTEST:                                     LAWRENCE FEDERAL SAVINGS BANK

/s/ Mary Kratzenburg                        By:  /s/ Tracy E. Brammer
--------------------                           ---------------------------------
                                               For the Entire Board of Directors

         [SEAL]

ATTEST:                                     LAWRENCE FINANCIAL HOLDINGS, INC.
                                              (Guarantor)

/s/ Mary Kratzenberg                        By:  /s/ Tracy E. Brammer
--------------------                           ---------------------------------
                                               For the Entire Board of Directors

         [SEAL]

WITNESS:                                    EXECUTIVE

/s/ Mary Kratzenburg                            /s/ Jack L. Blair
--------------------                            --------------------------------
                                                Jack L. BlairLAWRENCE FINANCIAL HOLDINGS, INC.
                              EMPLOYMENT AGREEMENT

         This AGREEMENT ("Agreement") is made effective as of December 28, 2000,
by and between Lawrence  Financial  Holdings,  Inc. (the "Holding  Company"),  a
corporation  organized under the laws of Maryland with its principal  offices at
311  South  Fifth  Street,   Ironton,   Ohio   45638-1609   and  Jack  L.  Blair
("Executive"). Any reference to "Institution" herein shall mean Lawrence Federal
Savings Bank or any successor thereto.

         WHEREAS, the Holding Company wishes to assure itself of the services of
Executive for the period provided in this Agreement; and

         WHEREAS, the Executive is willing to serve in the employ of the Holding
Company on a full-time basis for said period.

         NOW,  THEREFORE,  in  consideration  of  the  mutual  covenants  herein
contained,  and upon the other terms and conditions  hereinafter  provided,  the
parties hereby agree as follows:

1. POSITION AND RESPONSIBILITIES.

         During the period of Executive's employment hereunder, Executive agrees
to serve as  President  and Chief  Executive  Officer  of the  Holding  Company.
Executive  shall render  administrative  and management  services to the Holding
Company  such as are  customarily  performed  by persons in a similar  executive
capacity.  During said period, Executive also agrees to serve, if elected, as an
officer or director of any subsidiary of the Holding Company.

2. TERMS.

         (a) The period of Executive's  employment under this Agreement shall be
deemed to have  commenced as of the date first above written and shall  continue
for a period of thirty-six (36) full calendar months  thereafter.  Commencing on
the date of the execution of this Agreement, the term of this Agreement shall be
extended  for one day each day until such time as the board of  directors of the
Holding Company (the "Board") or Executive  elects not to extend the term of the
Agreement by giving written notice to the other party in accordance with Section
8 of this Agreement, in which case the term of this Agreement shall be fixed and
shall end on the third anniversary of the date of such written notice.

         (b) During the period of Executive's  employment hereunder,  except for
periods of absence  occasioned  by illness,  reasonable  vacation  periods,  and
reasonable  leaves of absence,  Executive  shall  devote  substantially  all his
business time, attention,  skill, and efforts to the faithful performance of his
duties hereunder, including activities and services related to the organization,
operation  and  management  of the  Holding  Company  and its direct or indirect
subsidiaries  ("Subsidiaries") and participation in community,  professional and
civic

<PAGE>

organizations;  provided,  however,  that,  with the  approval of the Board,  as
evidenced by a resolution of such Board, from time to time, Executive may serve,
or continue to serve,  on the boards of directors of, and hold any other offices
or positions in, companies or  organizations,  which, in such Board's  judgment,
will not present  any  conflict  of  interest  with the  Holding  Company or its
Subsidiaries,  or  materially  affect  the  performance  of  Executive's  duties
pursuant to this Agreement.

         (c)   Notwithstanding   anything  herein  contained  to  the  contrary,
Executive's employment with the Holding Company may be terminated by the Holding
Company or Executive during the term of this Agreement, subject to the terms and
conditions  of this  Agreement.  However,  Executive  shall not perform,  in any
respect,  directly  or  indirectly,  during the  pendency  of his  temporary  or
permanent   suspension  or  termination   from  the   Institution,   duties  and
responsibilities formerly performed at the Institution as part of his duties and
responsibilities  as  President  and  Chief  Executive  Officer  of the  Holding
Company.

3. COMPENSATION AND REIMBURSEMENT.

         (a) Executive shall be entitled to a salary from the Holding Company or
its Subsidiaries of $98,400 per year ("Base Salary").  Base Salary shall include
any  amounts of  compensation  deferred  by  Executive  under any  tax-qualified
retirement  or  welfare   benefit  plan  or  any  other  deferred   compensation
arrangement  maintained by the Holding Company and its  Subsidiaries.  Such Base
Salary  shall be  payable  in  accordance  with the  Holding  Company's  payroll
practices. During the period of this Agreement, Executive's Base Salary shall be
reviewed at least annually; the first such review will be made no later than one
year from the date of this  Agreement.  Such review  shall be  conducted  by the
Board or by a Committee of the Board delegated such responsibility by the Board.
The Committee or the Board may increase Executive's Base Salary at any time. Any
increase  in Base  Salary  shall  become  "Base  Salary"  for  purposes  of this
Agreement. In addition to Base Salary provided in this Section 3(a), the Holding
Company shall also provide Executive, at no premium cost to Executive,  with all
such other benefits as provided  uniformly to permanent  full-time  employees of
the Holding  Company  and its  Subsidiaries.  In  addition,  Executive  shall be
entitled  to  incentive  compensation  and  bonuses as  provided  in any plan or
arrangement of the Holding  Company or its  Subsidiaries  in which  Executive is
eligible to participate.

         (b) Executive shall be entitled to participate in any employee  benefit
plans,  arrangements and perquisites  substantially equivalent to those in which
Executive was participating or otherwise deriving benefit from immediately prior
to the beginning of the term of this Agreement,  and the Holding Company and its
Subsidiaries  will not,  without  Executive's  prior written  consent,  make any
changes in such  plans,  arrangements  or  perquisites  which  would  materially
adversely affect Executive's rights or benefits thereunder, except to the extent
that such changes are made  applicable  to all Holding  Company and  Institution
employees eligible to participate in such plans, arrangements and perquisites on
a  non-discriminatory  basis.  Without  limiting the generality of the foregoing
provisions of this Subsection (b), Executive shall be entitled to participate in
or receive benefits under all plans relating to stock options, restricted

                                        2

<PAGE>

stock  awards,  stock  purchases,   pension,  thrift,  supplemental  retirement,
profit-sharing,  employee stock  ownership,  group life  insurance,  medical and
other health and welfare coverage, education, cash or stock bonuses that are now
or hereafter made available by the Holding  Company or its  Subsidiaries  to its
senior  executives  and  key  management  employees,  subject  to and on a basis
consistent with the terms,  conditions and overall  administration of such plans
and  arrangements.  Executive  shall be entitled to incentive  compensation  and
bonuses as provided in any plan of the Holding  Company and its  Subsidiaries in
which Executive is eligible to participate.  Nothing paid to Executive under any
such plan or arrangement  will be deemed to be in lieu of other  compensation to
which Executive is entitled under this Agreement.

         (c) The  Holding  Company  shall  pay or  reimburse  Executive  for all
reasonable expenses incurred in the performance of Executive's obligations under
this  Agreement and may provide such  additional  compensation  in such form and
such amounts as the Board may from time to time determine.

4. PAYMENTS TO EXECUTIVE UPON AN EVENT OF TERMINATION.

         (a) Upon the occurrence of an Event of Termination  (as herein defined)
during  Executive's term of employment  under this Agreement,  the provisions of
this Section shall apply. As used in this  Agreement,  an "Event of Termination"
shall mean and include any one or more of the following:  (i) the termination by
the Holding Company of Executive's full-time employment hereunder for any reason
other than termination governed by Section 5(a) hereof, or for Cause, as defined
in Section 7 hereof;  (ii) Executive's  resignation  from the Holding  Company's
employ,  upon,  any (A)  failure to elect or reelect or to appoint or  reappoint
Executive as  President  and Chief  Executive  Officer,  unless  consented to by
Executive,   (B)  a  material  change  in  Executive's   function,   duties,  or
responsibilities  with the Holding  Company or its  Subsidiaries,  which  change
would  cause  Executive's  position  to  become  one of  lesser  responsibility,
importance,  or scope from the  position  and  attributes  thereof  described in
Section  1,  above,  unless  consented  to by  Executive,  (C) a  relocation  of
Executive's  principal  place  of  employment  by more  than 25  miles  from its
location  at the  effective  date  of this  Agreement,  unless  consented  to by
Executive, (D) a material reduction in the benefits and perquisites to Executive
from those being  provided as of the effective  date of this  Agreement,  unless
consented to by  Executive,  (E) a  liquidation  or  dissolution  of the Holding
Company or the  Institution,  or (F)  breach of this  Agreement  by the  Holding
Company.  Upon the  occurrence of any event  described in clauses (A), (B), (C),
(D), (E) or (F), above, Executive shall have the right to elect to terminate his
employment  under this  Agreement by  resignation  upon not less than sixty (60)
days prior written notice given within six full calendar  months after the event
giving rise to said right to elect.

         (b) Upon the  occurrence  of an  Event of  Termination,  on the Date of
Termination,  as defined in Section 8, the Holding Company shall be obligated to
pay Executive,  or, in the event of his  subsequent  death,  his  beneficiary or
beneficiaries, or his estate, as the case may be, a sum equal to the sum of: (i)
the Base Salary and bonuses in  accordance  with Section 3(a) of this  Agreement
that would have been paid to Executive for the remaining  term of this Agreement
had the Event of  Termination  not  occurred  and (ii) all  benefits,  including
health insurance in

                                        3

<PAGE>

accordance  with Section 3(b) that would have been provided to Executive for the
remaining term of this Agreement had an Event of  Termination  not occurred.  At
the  election of  Executive,  which  election is to be made prior to an Event of
Termination,  such  payments  shall be made in a lump sum.  In the event that no
election  is made,  payment  to  Executive  will be made on a  monthly  basis in
approximately  equal  installments  during the remaining  term of the Agreement.
Such  payments  shall  not be  reduced  in the  event  Executive  obtains  other
employment following termination of employment.

         (c) Upon the occurrence of an Event of Termination, the Holding Company
will  cause to be  continued  life,  medical,  dental  and  disability  coverage
substantially  equivalent to the coverage  maintained by the Holding  Company or
its  Subsidiaries  for Executive  prior to his termination at no premium cost to
Executive.  Such coverage  shall cease upon the expiration of the remaining term
of this Agreement.

5. CHANGE IN CONTROL.

         (a) For  purposes  of this  Agreement,  a "Change  in  Control"  of the
Holding  Company or the  Institution  shall mean an event of a nature that:  (i)
would be required to be reported in response to Item 1(a) of the current  report
on Form 8-K, as in effect on the date hereof, pursuant to Section 13 or 15(d) of
the Securities  Exchange Act of 1934, as amended (the "Exchange  Act");  or (ii)
results in a Change in Control of the  Institution or the Holding Company within
the  meaning of the Home  Owners'  Loan Act of 1933,  as  amended,  the  Federal
Deposit  Insurance Act, and the Rules and Regulations  promulgated by the Office
of Thrift  Supervision  (or its  predecessor  agency),  as in effect on the date
hereof  (provided,  that in applying the  definition of Change in Control as set
forth under the rules and regulations of the OTS, the Board shall substitute its
judgment  for that of the OTS);  or (iii)  without  limitation  such a Change in
Control  shall be deemed to have  occurred at such time as (A) any  "person" (as
the term is used in Sections  13(d) and 14(d) of the Exchange Act) is or becomes
the  "beneficial  owner"  (as  defined in Rule 13d-3  under the  Exchange  Act),
directly or indirectly,  of voting  securities of the Institution or the Holding
Company  representing 20% or more of the  Institution's or the Holding Company's
outstanding voting securities or right to acquire such securities except for any
voting  securities of the  Institution  purchased by the Holding Company and any
voting securities  purchased by any employee benefit plan of the Holding Company
or its  Subsidiaries,  or (B)  individuals  who constitute the Board on the date
hereof (the  "Incumbent  Board")  cease for any reason to  constitute at least a
majority thereof, provided that any person becoming a director subsequent to the
date hereof 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 the  Company's  stockholders  was approved by a Nominating  Committee  solely
composed of members which are Incumbent Board members, shall be, for purposes of
this clause (B),  considered as though he were a member of the Incumbent  Board,
or  (C) a  plan  of  reorganization,  merger,  consolidation,  sale  of  all  or
substantially  all the  assets of the  Institution  or the  Holding  Company  or
similar transaction occurs or is effectuated in which the Institution or Holding
Company  is not the  resulting  entity;  provided,  however,  that such an event
listed above will be deemed to have  occurred or to have been  effectuated  upon
the receipt of all required federal

                                        4

<PAGE>

regulatory  approvals not including the lapse of any statutory  waiting periods,
or  (D)  a  proxy  statement  has  been  distributed   soliciting  proxies  from
stockholders  of  the  Holding  Company,  by  someone  other  than  the  current
management of the Holding  Company,  seeking  stockholder  approval of a plan of
reorganization,  merger or  consolidation  of the Holding Company or Institution
with one or more corporations as a result of which the outstanding shares of the
class of securities  then subject to such plan or transaction  are exchanged for
or converted into cash or property or securities  not issued by the  Institution
or the Holding Company shall be  distributed,  or (E) a tender offer is made for
20% or more of the voting  securities of the Institution or Holding Company then
outstanding.

         (b) If a Change in Control has occurred pursuant to Section 5(a) or the
Board has determined  that a Change in Control has occurred,  Executive shall be
entitled to the benefits  provided in paragraphs  (c) and (d), of this Section 5
upon his  subsequent  termination  of  employment at any time during the term of
this Agreement due to (i) Executive's  dismissal,  or (ii) Executive's voluntary
resignation  following  any  demotion,  loss of  title,  office  or  significant
authority or responsibility,  reduction in the annual  compensation or reduction
in benefits or relocation  of his principal  place of employment by more than 25
miles from its location immediately prior to the Change in Control,  unless such
termination is because of his death or termination for Cause.

         (c) Upon Executive's  entitlement to benefits pursuant to Section 5(b),
the  Holding  Company  shall pay  Executive,  or in the event of his  subsequent
death, his beneficiary or  beneficiaries,  or his estate, as the case may be, as
severance pay or liquidated damages, or both, a sum equal to the greater of: (i)
the Base Salary and bonuses in  accordance  with Section 3(a) of this  Agreement
that would have been paid to Executive for the remaining  term of this Agreement
had the event  described in Subsection (b) of this Section 5 not occurred,  plus
the value,  as  calculated  by a recognized  firm  customarily  performing  such
valuation,  of any  stock  option  or  related  rights  which  as of the Date of
Termination have been granted to Executive, but are not exercisable by Executive
and the value of  restricted  stock  awards or  related  rights  which have been
granted to Executive,  but which  Executive does not have a  non-forfeitable  or
fully vested interest as of the Date of Termination and all benefits,  including
health insurance,  in accordance with Section 3(b) that would have been provided
to Executive for the remaining term of this Agreement had the event described in
Subsection  (b) of  this  Section  5 not  occurred;  or  (ii)  three  (3)  times
Executive's  Average Annual  Compensation  (as defined  herein) for the five (5)
preceding  taxable years that Executive has been employed by the Holding Company
or its  Subsidiaries or such lesser number of years in the event Executive shall
have been employed with the Holding Company or its  Subsidiaries  less than five
(5) years.  Such Average  Annual  Compensation  shall include all taxable income
paid by the Holding Company or its  Subsidiaries,  including but not limited to,
Base Salary,  commissions  and bonuses,  as well as  contributions  on behalf of
Executive to any pension and profit sharing plan, severance payments,  directors
or committee  fees and fringe  benefits  paid or to be paid to Executive  during
such years. At the election of Executive,  which election is to be made prior to
a Change in Control, such payment shall be made in a lump sum. In the event that
no election is made,  payment to  Executive  will be made on a monthly  basis in
approximately equal installments during the remaining term of the

                                        5

<PAGE>

Agreement.  Such payments  shall not be reduced in the event  Executive  obtains
other employment following termination of employment.

         (d) Upon Executive's  entitlement to benefits pursuant to Section 5(b),
the Company  will cause to be continued  life,  medical,  dental and  disability
coverage substantially  equivalent to the coverage maintained by the Institution
for  Executive  at no premium  cost to Executive  prior to his  severance.  Such
coverage and payments shall cease upon the expiration of thirty-six  (36) months
following the Change in Control.

6. CHANGE OF CONTROL RELATED PROVISIONS.

         Notwithstanding  Section  5, for any  taxable  year in which  Executive
shall be liable,  as  determined  for the payment of an excise tax under Section
4999 of the  Internal  Revenue  Code of 1986,  as amended  (the  "Code") (or any
successor provision  thereto),  with respect to any payment in the nature of the
compensation  made by the Holding Company or the Bank to (or for the benefit of)
Executive pursuant to this Agreement or otherwise, the Holding Company shall pay
to Executive an amount determined under the following formula:

         An amount equal to:  (E x P) + X

WHERE:

          X    =                     E x P
                  -------------------------------------------
                  1 - [(FI x (1 - SLI)) + SLI + E [+ M + PO]]

          E    = the rate at which the excise tax is assessed under Section 4999
                 of the Code;

          P    = the amount with  respect to which such excise tax is  assessed,
                 determined without regard to this Section 2;

          FI   = the highest  marginal rate of federal income,  employment,  and
                 other taxes (other than taxes imposed under Section 4999 of the
                 Code) applicable to Executive for the taxable year in question;
                 and

          SLI  = the sum of the highest marginal rates of income and payroll tax
                 applicable  to  Executive under applicable state and local laws
                 for the taxable year in question; and

          M    = highest marginal rate of Medicare tax; and

          PO   = adjustment  for  phase  out of or loss of  deduction,  personal
                 exemption or other similar items.

                                        6

<PAGE>

With  respect to any payment in the nature of  compensation  that is made to (or
for the benefit of)  Executive  under the terms of this Section or otherwise and
on which an excise  tax under  Section  4999 of the Code will be  assessed,  the
payment determined under Section 5 shall be made to Executive on the earliest of
(i) the date the Holding Company is required to withhold such tax, (ii) the date
the tax is required to be paid by Executive,  or (iii) at the time of the Change
in Control.  It is the intention of the parties that the Holding Company provide
Executive  with a full tax gross- up under the  provisions of this  Section,  so
that on a net after-tax  basis,  the result to Executive shall be the same as if
the excise tax under Section 4999 (or any successor  provisions) of the Code had
not been imposed.  The tax gross-up may be adjusted if  alternative  minimum tax
rules are applicable to Executive.

         Notwithstanding  the foregoing,  if it shall subsequently be determined
in a final judicial determination or a final administrative  settlement to which
Executive  is a party  that the excess  parachute  payment as defined in Section
4999 of the Code, reduced as described above, is more than the amount determined
as  "P,"  above  (such  greater  amount  being  hereafter  referred  to  as  the
"Determinative Excess Parachute Payment") then the Holding Company's independent
accountants  shall  determine the amount (the  "Adjustment  Amount") the Holding
Company  must  pay to  Executive,  in  order to put  Executive  (or the  Holding
Company,  as the case may be) in the same  position as Executive (or the Holding
Company,  as the case may be) would  have been if the amount  determined  as "P"
above  had  been  equal  to  the  Determinative  Excess  Parachute  Payment.  In
determining the Adjustment Amount,  the independent  accountants shall take into
account any and all taxes  (including any penalties and interest) paid by or for
Executive  or refunded  to  Executive  or for  Executive's  benefit.  As soon as
practicable  after the  Adjustment  Amount has been so  determined,  the Holding
Company shall pay the Adjustment Amount to Executive.

         In each  calendar  year that  Executive  receives  payments or benefits
under this Agreement, Executive shall report on his state and federal income tax
returns such  information as is consistent  with the  determination  made by the
independent  accountants of the Holding Company as described  above. The Holding
Company  shall  indemnify and hold  Executive  harmless from any and all losses,
costs and expenses  (including without limitation,  reasonable  attorney's fees,
interest,  fines and penalties)  which Executive incurs as a result of reporting
such information. Executive shall promptly notify the Holding Company in writing
whenever  Executive  receives notice of the Bank of a judicial or administrative
proceeding, formal or informal, in which the federal tax treatment under Section
4999 of the Code of any amount  paid or payable  under this  Agreement  is being
reviewed  or is in dispute.  The Holding  Company  shall  assume  control at its
expense over all legal and  accounting  matters  pertaining  to such federal tax
treatment  (except to the extent  necessary  or  appropriate  for  Executive  to
resolve any such proceeding with respect to any matter unrelated to amounts paid
or payable  pursuant to this contract) and Executive  shall cooperate fully with
the Holding Company in any such  proceeding.  Executive shall not enter into any
compromise or settlement or otherwise  prejudice any rights the Holding  Company
may have in connection therewith without prior consent to the Holding Company.

                                        7

<PAGE>

7. TERMINATION FOR CAUSE.

         The term  "Termination  for Cause"  shall mean  termination  because of
Executive's  personal  dishonesty,  willful misconduct,  any breach of fiduciary
duty involving  personal profit,  intentional  failure to perform stated duties,
willful violation of any law, rule, regulation (other than traffic violations or
similar  offenses),  final  cease and  desist  order or  material  breach of any
provision of this Agreement.  Notwithstanding the foregoing, Executive shall not
be deemed to have been  terminated  for Cause  unless and until there shall have
been  delivered to him a Notice of  Termination  which shall include a copy of a
resolution duly adopted by the affirmative  vote of not less than  three-fourths
of the  members of the Board at a meeting of the Board  called and held for that
purpose  (after  reasonable  notice to  Executive  and an  opportunity  for him,
together with counsel,  to be heard before the Board),  finding that in the good
faith  opinion  of  the  Board,  Executive  was  guilty  of  conduct  justifying
Termination  for  Cause  and  specifying  the  particulars  thereof  in  detail.
Executive shall not have the right to receive compensation or other benefits for
any period after Termination for Cause.  During the period beginning on the date
of the Notice of Termination  for Cause pursuant to Section 8 hereof through the
Date of  Termination,  stock  options  and  related  limited  rights  granted to
Executive  under any stock  option plan shall not be  exercisable  nor shall any
unvested  awards  granted  to  Executive  under  any stock  benefit  plan of the
Institution,  the Holding Company or any subsidiary or affiliate thereof,  vest.
At the Date of  Termination,  such stock options and related  limited rights and
any such unvested awards shall become null and void and shall not be exercisable
by or  delivered to Executive at any time  subsequent  to such  Termination  for
Cause.

8. NOTICE.

         (a) Any purported  termination  by the Holding  Company or by Executive
shall be  communicated  by Notice of Termination to the other party hereto.  For
purposes  of this  Agreement,  a "Notice  of  Termination"  shall mean a written
notice which shall indicate the specific termination provision in this Agreement
relied upon and shall set forth in reasonable detail the facts and circumstances
claimed to provide a basis for termination of Executive's  employment  under the
provision so indicated.

         (b) "Date of  Termination"  shall mean the date specified in the Notice
of Termination (which, in the case of a Termination for Cause, shall not be less
than thirty (30) days from the date such Notice of Termination is given).

         (c) If,  within  thirty  (30) days after any Notice of  Termination  is
given,  the party receiving such Notice of Termination  notifies the other party
that a dispute exists concerning the termination,  except upon the occurrence of
a Change in Control and voluntary termination by the Executive in which case the
Date of  Termination  shall be the date  specified  in the  Notice,  the Date of
Termination shall be the date on which the dispute is finally determined, either
by mutual written agreement of the parties,  by a binding  arbitration award, or
by a final judgment,  order or decree of a court of competent  jurisdiction (the
time for appeal  therefrom  having expired and no appeal having been  perfected)
and provided further that the Date of Termination shall be

                                        8

<PAGE>

extended  by a notice of dispute  only if such notice is given in good faith and
the party  giving  such notice  pursues  the  resolution  of such  dispute  with
reasonable  diligence.  Notwithstanding  the pendency of any such  dispute,  the
Holding  Company will continue to pay Executive his full  compensation in effect
when the notice giving rise to the dispute was given (including, but not limited
to, Base Salary) and continue him as a participant in all compensation,  benefit
and insurance plans in which he was participating when the notice of dispute was
given,  until the dispute is finally resolved in accordance with this Agreement.
Amounts paid under this  Section are in addition to all other  amounts due under
this  Agreement and shall not be offset  against or reduce any other amounts due
under this Agreement.

9. POST-TERMINATION OBLIGATIONS.

         All payments and benefits to Executive  under this  Agreement  shall be
subject  to  Executive's  compliance  with this  Section 9 for one (1) full year
after  the  earlier  of the  expiration  of this  Agreement  or  termination  of
Executive's   employment  with  the  Holding  Company.   Executive  shall,  upon
reasonable  notice,  furnish  such  information  and  assistance  to the Holding
Company as may reasonably be required by the Holding  Company in connection with
any litigation in which it or any of its  subsidiaries  or affiliates is, or may
become, a party.

10. NON-COMPETITION AND NON-DISCLOSURE.

         (a) Upon any termination of Executive's  employment  hereunder pursuant
to Section 4 hereof, Executive agrees not to compete with the Holding Company or
its  Subsidiaries for a period of one (1) year following such termination in any
city, town or county in which Executive's  normal business office is located and
the  Holding  Company or any of its  Subsidiaries  has an office or has filed an
application for regulatory approval to establish an office, determined as of the
effective date of such termination, except as agreed to pursuant to a resolution
duly adopted by the Board.  Executive  agrees that during such period and within
said cities, towns and counties, Executive shall not work for or advise, consult
or otherwise  serve with,  directly or  indirectly,  any entity  whose  business
materially competes with the depository, lending or other business activities of
the Holding Company or its  Subsidiaries.  The parties hereto,  recognizing that
irreparable  injury will result to the Holding Company or its Subsidiaries,  its
business  and  property in the event of  Executive's  breach of this  Subsection
10(a)  agree  that in the event of any such  breach by  Executive,  the  Holding
Company or its Subsidiaries, will be entitled, in addition to any other remedies
and damages  available,  to an injunction  to restrain the  violation  hereof by
Executive,  Executive's partners,  agents,  servants,  employees and all persons
acting for or under the direction of Executive.  Executive represents and admits
that in the event of the  termination  of his  employment  pursuant to Section 7
hereof,  Executive's  experience  and  capabilities  are such that Executive can
obtain  employment  in a business  engaged in other lines  and/or of a different
nature than the Holding Company or its Subsidiaries, and that the enforcement of
a remedy  by way of  injunction  will  not  prevent  Executive  from  earning  a
livelihood.  Nothing herein will be construed as prohibiting the Holding Company
or its  Subsidiaries  from pursuing any other remedies  available to the Holding
Company or its Subsidiaries for such breach or threatened breach,  including the
recovery of damages from Executive.

                                        9

<PAGE>

         (b) Executive  recognizes  and  acknowledges  that the knowledge of the
business activities and plans for business activities of the Holding Company and
its  Subsidiaries as it may exist from time to time, is a valuable,  special and
unique  asset of the  business  of the  Holding  Company  and its  Subsidiaries.
Executive  will not,  during or after the term of his  employment,  disclose any
knowledge of the past, present, planned or considered business activities of the
Holding Company and its Subsidiaries thereof to any person,  firm,  corporation,
or other entity for any reason or purpose whatsoever unless expressly authorized
by the Board of Directors  or required by law.  Notwithstanding  the  foregoing,
Executive  may disclose  any  knowledge of banking,  financial  and/or  economic
principles,  concepts or ideas which are not solely and exclusively derived from
he  business  plans and  activities  of the Holding  Company.  In the event of a
breach or threatened breach by Executive of the provisions of this Section,  the
Holding  Company will be entitled to an injunction  restraining  Executive  from
disclosing,  in whole or in part, the knowledge of the past, present, planned or
considered  business  activities of the Holding  Company or its  Subsidiaries or
from rendering any services to any person,  firm,  corporation,  other entity to
whom such knowledge, in whole or in part, has been disclosed or is threatened to
be  disclosed.  Nothing  herein will be  construed  as  prohibiting  the Holding
Company from pursuing any other  remedies  available to the Holding  Company for
such  breach or  threatened  breach,  including  the  recovery  of damages  from
Executive.

11. SOURCE OF PAYMENTS.

         (a) All  payments  provided in this  Agreement  shall be timely paid in
cash or check from the general funds of the Holding  Company  subject to Section
11(b).

         (b) Notwithstanding any provision herein to the contrary, to the extent
that  payments  and  benefits,  as  provided by this  Agreement,  are paid to or
received by Executive  under the Employment  Agreement  dated December 28, 2000,
between Executive and the Institution,  such compensation  payments and benefits
paid by the Institution will be subtracted from any amount due simultaneously to
Executive under similar provisions of this Agreement.  Payments pursuant to this
Agreement and the Institution  Agreement shall be allocated in proportion to the
level of activity  and the time  expended on such  activities  by  Executive  as
determined by the Holding Company and the Institution on a quarterly basis.

12. EFFECT ON PRIOR AGREEMENTS AND EXISTING BENEFITS PLANS.

         This Agreement  contains the entire  understanding  between the parties
hereto and supersedes any prior employment agreement between the Holding Company
or any  predecessor  of the  Holding  Company  and  Executive,  except that this
Agreement  shall not affect or operate  to reduce  any  benefit or  compensation
inuring  to  Executive  of a kind  elsewhere  provided.  No  provision  of  this
Agreement  shall be  interpreted  to mean that Executive is subject to receiving
fewer benefits than those available to him without reference to this Agreement.

                                        10

<PAGE>

13. NO ATTACHMENT.

         (a) Except as required by law, no right to receive  payments under this
Agreement  shall be  subject to  anticipation,  commutation,  alienation,  sale,
assignment,  encumbrance,  charge,  pledge, or  hypothecation,  or to execution,
attachment,  levy, or similar process or assignment by operation of law, and any
attempt,  voluntary  or  involuntary,  to affect any such action  shall be null,
void, and of no effect.

         (b) This Agreement  shall be binding upon, and inure to the benefit of,
Executive and the Holding Company and their respective successors and assigns.

14. MODIFICATION AND WAIVER.

         (a)  This  Agreement  may  not be  modified  or  amended  except  by an
instrument in writing signed by the parties hereto.

         (b) No term or condition of this Agreement shall be deemed to have been
waived, nor shall there be any estoppel against the enforcement of any provision
of this Agreement,  except by written  instrument of the party charged with such
waiver or estoppel.  No such written waiver shall be deemed a continuing  waiver
unless specifically  stated therein,  and each such waiver shall operate only as
to the specific  term or condition  waived and shall not  constitute a waiver of
such term or condition for the future as to any act other than that specifically
waived.

15. SEVERABILITY.

         If, for any reason, any provision of this Agreement, or any part of any
provision, is held invalid, such invalidity shall not affect any other provision
of this  Agreement or any part of such  provision not held so invalid,  and each
such other  provision and part thereof shall to the full extent  consistent with
law continue in full force and effect.

16. HEADINGS FOR REFERENCE ONLY.

         The headings of sections and paragraphs  herein are included solely for
convenience of reference and shall not control the meaning or  interpretation of
any of the provisions of this Agreement.

17. GOVERNING LAW.

         This  Agreement  shall be governed by the laws of the State of Maryland
regardless of the laws that might otherwise govern under  applicable  principles
of conflicts of law.

                                        11

<PAGE>

18. ARBITRATION.

         Any dispute or  controversy  arising under or in  connection  with this
Agreement shall be settled exclusively by arbitration,  conducted before a panel
of three  arbitrators  sitting in a location  selected by Executive within fifty
(50) miles from the location of the Institution, in accordance with the rules of
the American Arbitration  Association then in effect. Judgment may be entered on
the arbitrator's award in any court having jurisdiction; provided, however, that
Executive shall be entitled to seek specific performance of his right to be paid
until the Date of Termination  during the pendency of any dispute or controversy
arising under or in connection with this Agreement.

         In the event any dispute or controversy  arising under or in connection
with  Executive's  termination  is  resolved in favor of  Executive,  whether by
judgment, arbitration or settlement,  Executive shall be entitled to the payment
of all  back-pay,  including  salary,  bonuses and any other cash  compensation,
fringe  benefits and any  compensation  and benefits  due  Executive  under this
Agreement.

19. PAYMENT OF LEGAL FEES.

         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 Holding Company,  if Executive is successful  pursuant to a
legal judgment, arbitration or settlement.

20. INDEMNIFICATION.

         (a) The Holding Company shall provide  Executive  (including his heirs,
executors and  administrators)  with coverage  under a standard  directors'  and
officers'  liability  insurance  policy  at  its  expense  and  shall  indemnify
Executive (and his heirs,  executors and  administrators)  to the fullest extent
permitted  under  Maryland law against all expenses and  liabilities  reasonably
incurred  by him in  connection  with  or  arising  out of any  action,  suit or
proceeding  in which he may be  involved by reason of his having been a director
or officer of the Holding Company  (whether or not he continues to be a director
or officer at the time of incurring such expenses or liabilities), such expenses
and liabilities to include,  but not be limited to,  judgments,  court costs and
attorneys' fees and the cost of reasonable settlements.

         (b) Any payments made to Executive pursuant to this Section are subject
to and conditioned upon compliance with 12  U.S.C.ss.1828(k)  and 12 C.F.R. Part
359 and any rules or regulations promulgated thereunder.

21. SUCCESSOR TO THE HOLDING COMPANY.

         The Holding  Company shall  require any successor or assignee,  whether
direct or indirect, by purchase,  merger,  consolidation or otherwise, to all or
substantially  all the  business  or assets of the  Institution  or the  Holding
Company, expressly and unconditionally to assume and agree

                                        12

<PAGE>

to perform the Holding Company's  obligations under this Agreement,  in the same
manner and to the same  extent  that the  Holding  Company  would be required to
perform if no such succession or assignment had taken place.

                           [REMAINDER OF INTENTIONALLY BLANK]

                                       13

<PAGE>

                                   SIGNATURES

         IN WITNESS WHEREOF,  Lawrence Financial Holdings,  Inc. has caused this
Agreement  to be  executed  and its  seal to be  affixed  hereunto  by its  duly
authorized  officer and its directors,  and Executive has signed this Agreement,
on the 28th day of December, 2000.

ATTEST:                                    LAWRENCE FINANCIAL HOLDINGS, INC.

/s/ Mary Kratzenberg                       By:   /s/ Tracy E. Brammer
--------------------                           ---------------------------------
                                               For the Entire Board of Directors

                  [SEAL]

WITNESS:                                   EXECUTIVE

/s/ Mary Kratzenberg                       /s/ Jack L. Blair
--------------------                       -------------------------------------
                                           Jack L. Blair

                                       14

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