Lake Shore Bancorp, Inc. (Form: S-8, Received: 04/03/2007 10:26:55)

L AKE S HORE B ANCORP , I NC .

A WARD R ECIPIENT

As filed with the Securities and Exchange Commission on April 3, 2007

Registration No. 333-[ ]

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form S-8

REGISTRATION STATEMENT

under

THE SECURITIES ACT OF 1933

Lake Shore Bancorp, Inc.

(Exact name of registrant as specified in its charter)

United States

6035

20-4729288

(State or other jurisdiction of

incorporation or organization)

(Primary Standard Industrial

Classification Code Number)

(I.R.S. Employer

Identification No.)

125 East Fourth Street

Dunkirk, New York 14048

(716) 366-4070

(Address, including Zip Code, of principal executive offices)

Lake Shore Bancorp, Inc. 2006 Stock Option Plan

Lake Shore Bancorp, Inc. 2006 Recognition and Retention Plan

(Full title of the Plan)

David C. Mancuso

President, Chief Executive Officer and Director

Lake Shore Bancorp, Inc.

125 East Fourth Street

Dunkirk, New York 14048

(716) 366-4070

Copy to:

V. Gerard Comizio, Esq.

Thacher Proffitt & Wood LLP

1700 Pennsylvania Avenue, NW, Suite 800

Washington, DC 20006

(202) 347-8400

(Name and address, including Zip Code, telephone number and area code, of agent for service)

CALCULATION OF REGISTRATION FEE


Title of Securities to be Registered	Amount to be Registered		Proposed Maximum Offering Price Per Share		Proposed Maximum Aggregate Offering Price			Amount of Registration Fee
Common Stock, $.01 par value	416,587	(1)	(2	)	$	5,004,300.52	(2)	$	153.63

(1)

Based on the total number of shares of common stock of Lake Shore Bancorp, Inc. (the “Company”) reserved for issuance upon the exercise of options granted pursuant to the Lake Shore Bancorp, Inc. 2006 Stock Option Plan (“Option Plan”) and the total number of shares of common stock authorized for awards under the Lake Shore Bancorp, Inc. 2006 Recognition and Retention Plan (the “RRP”). There are 241,546 shares of common stock subject to options currently granted and 56,016 shares of common stock reserved for awards under the Option Plan and 83,305 shares of common stock currently granted and 35,720 shares authorized for awards under the RRP (collectively, the “Plans”). In addition to such shares, this registration statement also covers an undetermined number of shares of common stock of the Company that, by reason of certain events specified in the Plans, may become issuable upon exercise of option or grant of awards through the application of certain anti-dilution provisions.

(2)

Estimated solely for purpose of calculating the registration fee in accordance with Rule 457(h) of the Securities Act of 1933, as amended (the “Securities Act”), pursuant to which 241,546 shares of the Company were deemed offered pursuant to the Plans at $11.50 and 175,041 shares that may be acquired pursuant to options or pursuant to other equity awards granted in future are deemed to be offered at $12.72 per share, the average of the daily high and low sales prices of common stock of the Company on the Nasdaq National Market at the close of trading on March 30, 2007.

PART I

INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS

Item 1.

Plan Information.

Not required to be filed with the Securities and Exchange Commission (the “Commission”).

Item 2.

Registrant Information and Employee Plan Annual Information.

Not required to be filed with the Commission.

Note: The document containing the information specified in this Part I will be sent or given to employees as specified by Rule 428(b)(1). Such document need not be filed with the Commission either as part of this registration statement or as prospectuses or prospectus supplements pursuant to Rule 424. These documents and the documents incorporated by reference in this registration statement pursuant to Item 3 of Part II of this form, taken together, constitute a prospectus that meets the requirements of Section 10(a) of the Securities Act.

PART II

Item 3.

Incorporation of Documents by Reference.

The following documents and information heretofore filed with the Commission by Lake Shore Bancorp, Inc. (the “Registrant”) (File No. 000-51821) are incorporated by reference in this registration statement:

(1)	the description of the Registrant’s common stock contained in the Registrant’s Registration Statement on Form 8-A dated February 23, 2006; and

(2)	The Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 2006 filed pursuant to Rule 13a-1 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”); and

All documents filed by the Registrant pursuant to Sections 13(a), 13(c), 14, or 15(d) of the Exchange Act after the end of the fiscal year ended December 31, 2006 and prior to the filing of the termination of the offering of the common stock hereby shall be deemed incorporated by reference into this registration statement and to be a part hereof from the date of filing of such documents. Any statement contained in a document incorporated or deemed to be incorporated by reference herein shall be deemed to be modified or superseded for purposes of this prospectus to the extent that a statement contained herein or in any other subsequently filed document which also is or is deemed to be incorporated by reference herein modifies or supersedes such statement. Any statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this registration statement.

The Company will provide without charge to each person to whom the prospectuses are delivered, upon request of any such person, a copy of any or all of the foregoing documents

incorporated herein by reference (other than exhibits to such documents). Written requests should be directed to: Rachel A. Foley, Lake Shore Bancorp, Inc., 125 East Fourth Street, Dunkirk, New York 14048. Telephone requests may be directed to (716) 366-4070.

Item 4.

Description of Securities.

Not Applicable.

Item 5.

Interests of Named Experts and Counsel.

Not Applicable.

Item 6.

Indemnification of Directors and Officers.

12 C.F.R. Section 545.121 of OTS Regulations sets forth the ability of a federal savings & loan association to indemnify its officers and directors. This section provides that a savings association shall indemnify any person against whom an action is brought or threatened because that person is or was a director, officer or employee of the association for: (1) any amount for which that person become liable under a judgment if such action; and (2) reasonable costs and expenses, including reasonable attorney’s fees paid or incurred by that person in defending or settling such action, or in enforcing his or her rights under such section if he or she attains a favorable judgment in such enforcement action.

Indemnification shall be made to such individuals if (1) final judgments on the merits is in the individual’s favor; or (2) in case of (i) settlement; (ii) final judgment against the individual, or (iii) final judgment in the individual’s favor, other than on the merits, if a majority of the disinterested directors determine that the individual was acting in good faith within the scope of his or her employment or authority as he or she could have reasonable perceived it under the circumstances and for a purpose he or she could reasonably have believed under the circumstances was in the best interests of the savings association or its members.

The section also provides that no indemnification may be made unless the association gives the OTS 60 days notice of its intention to make such indemnification.

In addition to providing indemnification, under OTS Regulations, a savings association may obtain insurance to protect it and its officers, directors and employees from potential losses arising from claims against any of them for alleged wrongful acts, or wrongful acts, committed in their capacity as directors, officers or employees. However, the savings association may not obtain insurance which provides for payment of losses of any person incurred as a consequence of his or her willful or criminal misconduct.

Section 545.121 of OTS regulations is subject to and qualified by 12 U.S.C § 1821(k) which provides in general that a director or officer of an insured depository institution may be held personally liable for monetary damages by, on behalf of, or at the request or direction of the Federal Deposit Insurance Corporation in certain circumstances.

Section 12 of the Company’s Charter provides that it shall indemnify a director, officer or shareholder against damages for breach of any duty owed to the Company or its

shareholders, except that the indemnification provision shall not relieve a director or officer from liability for any breach of duty based upon an act or omission (a) in breach of such person’s duty of loyalty to the Company or its shareholders or (b) not in good faith or involved in a knowing violation of law, or resulting in receipt by such person of an improper personal benefit. If the regulations of the OTS are amended after the date hereof to authorize action further eliminating or limiting the personal liability of directors or officers, then the liability of a director or officer of the Company shall be eliminated or limited to the fullest extent permitted by OTS regulations, as so amended. Any repeal or modification of Section 12 by the directors of the Company will be prospective only and shall not adversely affect any right or protection of a director or officer existing at the time of such repeal or modification.

The Company and Lake Shore Savings Bank (the “Bank”) have each entered into a separate Employment Agreement with David C. Mancuso. The Agreements each provide for indemnification to be provided to Mr. Mancuso to the fullest extent permitted under federal law. The Company and the Bank are also parties to Change of Control Agreements with Reginald S. Corsi and Rachel A. Foley, which provide for indemnification for attorneys’ fees in some instances. These Change of Control Agreements are guaranteed by the Company.

Item 7.

Exemption from Registration Claimed.

Not Applicable.

Item 8.

Exhibits.



4.1		Charter of Lake Shore Bancorp, Inc., filed on November 4, 2005 as Exhibit 3.1 to Registrant’s Registration Statement on Form S-1 (File No. 333-129439), is incorporated herein by reference.

4.2		Bylaws of Lake Shore Bancorp, Inc., filed on February 8, 2006 as Exhibit 3.2 to Registrant’s Registration Statement on Form S-1/A (File No. 333-129439), is incorporated herein by reference.

4.3		Form of Restricted Stock Award Agreement under the Lake Shore Bancorp, Inc. 2006 Recognition and Retention Plan.

4.4		Form of Option Agreement under the Lake Shore Bancorp, Inc. 2006 Stock Option Plan.

5.1		Opinion of Thacher Proffitt & Wood LLP .

23.1		Consent of Beard Miller Company LLP .

23.2		Consent of Thacher Proffitt & Wood LLP (included in Exhibit 5.1).

99.1		Lake Shore Bancorp, Inc. 2006 Stock Option Plan filed on September 7, 2006 as Appendix A to Registrant’s Definitive Proxy Statement (File No. 000-51821), is incorporated herein by reference.

99.2		Lake Shore Bancorp, Inc. 2006 Recognition and Retention Plan filed on September 7, 2006 as Appendix B to Registrant’s Definitive Proxy Statement (File No. 000-51821), is incorporated herein by reference.

Item 9.

Undertakings.

A. Rule 415 offering . The undersigned Registrant hereby undertakes:

(1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:

(i) To include any prospectus required by Section 10(a)(3) of the Securities Act;

(ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b)) if, in the aggregate, the changes in volume and price represent no more than 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement; and

(iii) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement;

Provided, however , that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the registration statement is on Form S-3 or Form S-8, and the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed by the registrant pursuant to Section 13 or 15(d) of the Exchange Act that are incorporated by reference in the registration statement.

(2) That, for the purpose of determining liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

(3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.

B. Filings incorporating subsequent Exchange Act documents by reference . The undersigned Registrant hereby undertakes that, for purposes of determining any liability under

the Securities Act, each filing of the Registrant’s annual report pursuant to Section 13(a) or 15(d) of the Exchange Act (and, where applicable, each filing of an employee benefit plan’s annual report pursuant to Section 15(d) of the Exchange Act) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

C. Incorporated annual and quarterly reports . The undersigned registrant hereby undertakes to deliver or cause to be delivered with the prospectus, to each person to whom the prospectus is sent or given, the latest annual report to security holders that is incorporated by reference in the prospectus and furnished pursuant to and meeting the requirements of Rule 14a-3 or Rule 14c-3 under the Exchange Act; and, where interim financial information required to be presented by Article 3 of Regulation S-X are not set forth in the prospectus, to deliver, or cause to be delivered to each person to whom the prospectus is sent or given, the latest quarterly report that is specifically incorporated by reference in the prospectus to provide such interim financial information.

D. Filing of registration on Form S-8 . Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant for expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.

SIGNATURES

Pursuant to the requirements of the Securities Act, the Registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-8 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Dunkirk, State of New York on March 28, 2007.


Lake Shore Bancorp, Inc. (Registrant)

By:		/s/ David C. Mancuso
		David C. Mancuso
		President, Chief Executive Officer and Director

Pursuant to the requirements of the Securities Act and any rules and regulations promulgated thereunder, this Registration Statement, has been signed by the following persons in the capacities and on the dates indicated.


Name	Title	Date

/s/ Michael E. Brunecz	Chairman	March 28, 2007
Michael E. Brunecz

/s/ Daniel P. Reininga	Vice Chairman	March 28, 2007
Daniel P. Reininga

/s/ David C. Mancuso	President, Chief Executive Officer and Director	March 28, 2007
David C. Mancuso

/s/ Rachel A. Foley	Chief Financial Officer	March 28, 2007
Rachel A. Foley


Name	Title	Date

/s/ Sharon E. Brautigam	Director	March 28, 2007
Sharon E. Brautigam

/s/ James P. Foley, DDS	Director	March 28, 2007
James P. Foley, DDS

/s/ Thomas E. Reed	Director	March 28, 2007
Thomas E. Reed

/s/ Gary W. Winger	Director	March 28, 2007
Gary W. Winger

/s/ Nancy L. Yocum	Director	March 28, 2007
Nancy L. Yocum

EXHIBIT INDEX


Exhibit Number		Description
4.1		Charter of Lake Shore Bancorp, Inc., filed on November 4, 2005 as Exhibit 3.1 to Registrant’s Registration Statement on Form S-1 (File No. 333-129439), is incorporated herein by reference.

4.2		Bylaws of Lake Shore Bancorp, Inc., filed on February 8, 2006 as Exhibit 3.2 to Registrant’s Registration Statement on Form S-1/A (File No. 333-129439), is incorporated herein by reference.

4.3		Form of Restricted Stock Award Agreement under the Lake Shore Bancorp, Inc. 2006 Recognition and Retention Plan.

4.4		Form of Option Agreement under the Lake Shore Bancorp, Inc. 2006 Stock Option Plan.

5.1		Opinion of Thacher Proffitt & Wood LLP , counsel for Registrant, as to the legality of the securities being registered.

23.1		Consent of Beard Miller Company LLP .

23.2		Consent of Thacher Proffitt & Wood LLP (included in Exhibit 5.1).

99.1		Lake Shore Bancorp, Inc. 2006 Stock Option Plan filed on September 7, 2006 as Appendix A to Registrant’s Definitive Proxy Statement (File No. 000-51821), is incorporated herein by reference.

99.2		Lake Shore Bancorp, Inc. 2006 Recognition and Retention Plan filed on September 7, 2006 as Appendix B to Registrant’s Definitive Proxy Statement (File No. 000-51821), is incorporated herein by reference.

Exhibit 4.3

L AKE S HORE B ANCORP , I NC .

2006 R ECOGNITION AND R ETENTION P LAN

R ESTRICTED S TOCK A WARD N OTICE




Name of Award Recipient		Social Security Number


	Street Address


City	State	ZIP Code

This Restricted Stock Award Notice is intended to set forth the terms and conditions on which an Award has been granted under the Lake Shore Bancorp, Inc. 2006 Recognition and Retention Plan. Set forth below are the specific terms and conditions applicable to this Award. Attached as Exhibit A are its general terms and conditions.


Restricted Stock Award	(A)	(B)	(C)	(D)	(E)
Effective Date

Class of Shares*	Common	Common	Common	Common	Common

No. of Awarded Shares*

Type of Award (Escrow or Legended Certificate)

Vesting Date*

*	Subject to adjustment as provided in the Plan and the General Terms and Conditions.

By signing where indicated below, Lake Shore Bancorp, Inc. (the “Company”) grants this Award upon the specified terms and conditions, and the Award Recipient acknowledges receipt of this Restricted Stock Award Notice, including Exhibit A, and agrees to observe and be bound by the terms and conditions set forth herein.

Instructions : This page should be completed by or on behalf of the Compensation Committee. Any blank space intentionally left blank should be crossed out. An Award consists of shares granted with uniform terms and conditions. Where shares granted under an Award are awarded on the same date with varying terms and conditions (for example, varying vesting dates), the awards should be recorded as a series of grants each with its own uniform terms and conditions.

EXHIBIT A

L AKE S HORE B ANCORP , I NC .

2006 R ECOGNITION AND R ETENTION P LAN

R ESTRICTED S TOCK A WARD

General Terms And Conditions

Section 1. Size and Type of Award . The shares of Common Stock, par value $0.01 per share, of Lake Shore Bancorp, Inc. (“Shares”) covered by this Award (“Awarded Shares”) are listed on this Restricted Stock Award Notice. Your Restricted Stock Award Notice designates the Awarded Shares as either “Escrow” or “Legended Certificate”.

(a) Legended Certificate . If your Awarded Shares are designated “Legended Certificate,” a stock certificate evidencing the Awarded Shares will be issued in your name and held in a brokerage account at the Plan Trustee. The stock certificate will bear a legend indicating that it is subject to all of the terms and conditions of this Award Notice and the Plan. You will be required to elect to be taxed on the Fair Market Value of the Awarded Shares as of the date they are placed in the brokerage account in your name, pursuant to section 83(b) of the Internal Revenue Code of 1986, as amended. You must make this election in writing, in the manner required by applicable Internal Revenue Service Regulations, and file it with the Internal Revenue Service and the Company within 30 days after the date on which the Awarded Shares are placed in your brokerage account.

(b) Escrow . If your Awarded Shares are designated “Escrow,” the Awarded Shares will either be held in the name of the Plan Trustee or Compensation Committee on a pooled basis with other Awarded Shares that have been designated “Escrow,” or they will be evidenced by a legended stock certificate in your name that will be placed in a brokerage account for you at the Plan Trustee. You will not be permitted to elect to be taxed currently on the Fair Market Value of the Awarded Shares and instead will be subject to income tax on the Awarded Shares as and when they become vested.

Section 2. Vesting .

(a) Vesting Dates . The Vesting Dates for your Awarded Shares are specified on this Award Notice. On each Vesting Date, you will obtain unrestricted ownership of the Awarded Shares that vest on that Vesting Date. A stock certificate (or a book entry listing) evidencing your unrestricted ownership of the vested Awarded Shares will be deposited in your brokerage account at the Plan Trustee. If a legended stock certificate evidencing these Awarded Shares was previously placed in your brokerage account, it will be exchanged for an unrestricted certificate or book entry listing.

(b) Forfeitures . If you terminate service with the Company prior to a Vesting Date, you will forfeit any Awarded Shares that are scheduled to vest on that date. When you forfeit Awarded Shares, all of your interest in the Awarded Shares will be canceled and any stock certificate or other evidence of ownership that was placed in a brokerage account for you will be returned to the Plan Trustee to be used for future awards to others. You agree to take any action and execute and deliver any document that the Company requests to effect the return of your unvested Awarded Shares. In the event you do not cooperate with the Company in this regard, you hereby appoint and designate the Company as your attorney-in-fact for the purpose of taking any action and signing any document, in your name, which the Company determines is necessary to enforce the forfeiture.

(c) Accelerated Vesting . All of your Awarded Shares that have not previously vested will become fully vested immediately, and without any further action on your part, in the event of your death, Disability (as defined in the Plan), Retirement (as defined in the Plan) or in the event a Change of Control (as defined in the Plan). You may designate a Beneficiary to receive any Awarded Shares that vest upon your death using the Beneficiary Designation attached as Appendix A.

(d) Definition of Service . For purposes of determining the vesting of your Awarded Shares, you will be deemed to be in the service of the Company for so long as you serve in any capacity as an employee, officer, non-employee director or emeritus director of the Company or its affiliates.

Section 3. Dividends . If your Awarded Shares are in the form of Legended Certificates, any dividends declared by the Company with a record date that is after the Effective Date specified in this Award Notice will be credited to your brokerage account at the Plan Trustee for your benefit on an unrestricted basis. If your Awarded Shares are designated “Escrow”, you will receive the dividends on an unrestricted basis, but they will be paid to you by, and will be taxable in the same manner as other compensation paid to you by, the Company; by signing this Award Notice and accepting its terms, you direct the Plan Trustee to remit to the Company for payment to you any dividends that either of them may receive as the record holder of your unvested Awarded Shares.

Section 4. Voting Rights . You shall have the right to control all voting rights relating to all unvested Awarded Shares. If your Awarded Shares are placed in your brokerage account at the Plan Trustee, you will receive proxy materials for voting in the same manner as other shareholders with Shares in brokerage accounts. If your unvested Awarded Shares are held by the Plan Trustee, the Plan Trustee will ask you for voting directions and will follow your directions in voting your unvested Awarded Shares.

Section 5. Amendment . This Award Notice may be amended, in whole or in part and in any manner not inconsistent with the provisions of the Plan, at any time and from time to time, by written agreement between you and the Company.

Section 6. Plan Provisions Control . This Award Notice, and the rights and obligations created hereunder, shall be subject to all of the terms and conditions of the Plan. In the event of any conflict between the provisions of the Plan and the provisions of this Award Notice, the terms of the Plan, which are incorporated herein by reference, shall control.

A PPENDIX A TO R ESTRICTED S TOCK A WARD N OTICE

L AKE S HORE B ANCORP , I NC .

2006 R ECOGNITION AND R ETENTION P LAN

Beneficiary Designation Form

GENERAL

INFORMATION

Use this form to designate the Beneficiary(ies) who will receive Shares available for distribution at the time of your death.

Name of

Award Recipient

Social Security Number

– –

BENEFICIARY

DESIGNATION

Complete sections A and B. If no percentage shares are specified, each Beneficiary in the same class (primary or contingent) shall have an equal share. If any designated Beneficiary predeceases you, the shares of each remaining Beneficiary in the same class (primary or contingent) shall be increased proportionately.

A. PRIMARY BENEFICIARY(IES). I hereby designate the following person as my primary Beneficiary under the Plan, reserving the right to change or revoke this designation at any time prior to my death:



Name	Address	Relationship	Birthdate	Share


					%



					%



					%

		Total = 100%

B. CONTINGENT BENEFICIARY(IES). I hereby designate the following person(s) as my contingent Beneficiary(ies) under the Plan to receive benefits only if all of my primary Beneficiaries should predecease me, reserving the right to change or revoke this designation at any time prior to my death with respect to all outstanding Awarded Shares:

Name	Address	Relationship	Birthdate	Share



					%



					%



					%

		Total = 100%

I understand that this Beneficiary Designation shall be effective only if properly completed and received by the Corporate Secretary of Lake Shore Bancorp, Inc. prior to my death, and that it is subject to all of the terms and conditions of the Plan. I also understand that an effective Beneficiary designation revokes my prior designation(s) with respect to all outstanding Awarded Shares.

Your Signature

Date

_________________________________________Internal Use Only_________________________________________

This Beneficiary Designation was received by the Corporate Secretary of Lake Shore Bancorp, Inc. on the date indicated.

Comments

Authorized Signature

Date

Exhibit 4.4

L AKE S HORE B ANCORP , I NC .

2006 S TOCK O PTION P LAN

S TOCK O PTION C ERTIFICATE



Name of Optionee		Social Security Number


	Street Address


City	State	ZIP Code

This Stock Option Agreement is intended to set forth the terms and conditions on which a Stock Option has been granted under the Lake Shore Bancorp, Inc. 2006 Stock Option Plan. Set forth below are the specific terms and conditions applicable to this Stock Option. Attached as Exhibit A are its general terms and conditions.


Option Grant	(A)	(B)	(C)	(D)	(E)
Grant Date:

Class of Optioned Shares*	Common	Common	Common	Common	Common

No. of Optioned Shares*

Exercise Price Per Share*

Option Type (ISO or NQSO)

Vesting

Earliest Exercise Date*

Option Expiration Date*

*	Subject to adjustment as provided in the Plan and the General Terms and Conditions.

By signing where indicated below, Lake Shore Bancorp, Inc. (the “Company”) grants this Stock Option upon the specified terms and conditions, and the Optionee acknowledges receipt of this Stock Option Agreement, including Exhibit A , and agrees to observe and be bound by the terms and conditions set forth herein and acknowledges receipt of a copy of the Lake Shore Bancorp, Inc. 2006 Stock Option Plan.

Instructions : This page should be completed by or on behalf of the Compensation Committee. Any blank space intentionally left blank should be crossed out. An option grant consists of a number of optioned shares with uniform terms and conditions. Where options are granted on the same date with varying terms and conditions (for example, varying exercise prices or earliest exercise dates), the options should be recorded as a series of grants each with its own uniform terms and conditions.

EXHIBIT A

L AKE S HORE B ANCORP , I NC . 2006 S TOCK O PTION P LAN

S TOCK O PTION C ERTIFICATE

General Terms and Conditions

Section 1. Option Size and Type . The number of shares of Common Stock, par value $0.01 per share (“Shares”), that have been optioned to you under the Lake Shore Bancorp, Inc. 2006 Stock Option Plan (the “Plan”) is specified in this Stock Option Certificate. If the “Option Type” shown for your stock option is “ISO”, then your stock option has been designed with the intent that it qualify to the maximum permissible extent for the special tax benefits applicable to incentive stock options under the Internal Revenue Code of 1986. If the “Option Type” shown for your stock options is “NQSO”, then incentive stock option tax treatment is not applicable.

Section 2. Exercise Price . The Exercise Price for your stock options is the price per Share at which you may acquire the Shares that have been optioned to you and is specified in this Stock Option Certificate. As a general rule, the Exercise Price for your stock options will not change unless there is a stock split, stock dividend, merger or other major corporate event that justifies an adjustment.

Section 3. Vesting .

(a) Earliest Exercise Date . You may not exercise your stock options until they are vested. The date on which your stock options become vested is specified in this Stock Option Certificate as the Earliest Exercise Date. As a general rule, you must be in the service of the Company on an Earliest Exercise Date in order to be vested in the stock options that vest on that date. You may acquire the Shares that have been optioned to you by exercising your stock options at any time during the period beginning on the Earliest Exercise Date and continuing until the applicable Option Expiration Date, by completing and filing the Notice of Exercise of Stock Option that is attached to this Stock Option Certificate as Appendix A and by following the procedures outlined therein.

(b) Forfeitures . If you terminate service with the Company prior to an Earliest Exercise Date, you will forfeit any stock options that are scheduled to vest on that date. When you forfeit stock options, you relinquish any and all rights that you have to acquire the Shares that were optioned to you.

(c) Accelerated Vesting . Your outstanding stock options that have not previously vested will become fully and immediately vested, without any further action on your part, in the event of your death or Disability or Retirement (if permitted by the terms of the Plan) before your termination of service with the Company. Similarly, all of your outstanding stock options that have not previously vested will become fully and immediately vested if a Change of Control occurs before your termination of service with the Company; provided, that these unvested stock options shall accelerate vesting only if no substitute grant is made pursuant to section 7.3(b) of the Plan. If vesting accelerates, the accelerated vesting date will be the applicable Earliest Exercise Date. You may designate a beneficiary to inherit your rights to any vested, unexercised stock options that are outstanding to you at your death using the Beneficiary Designation attached as Appendix B.

Section 4. Option Expiration Date . To derive any benefit from your stock options, you must exercise them during the period that begins on the applicable Earliest Exercise Date and ends on the Option Expiration Date. The Option Expiration Date for your stock options is specified in this Stock Option Certificate. Your Option Expiration Date may be accelerated in the event of your termination of service with the Company. Your stock options will expire on the earliest of (i) the Option Expiration Date, (ii) three months after your termination of service with the Company for any reason other than death, Disability (as defined in the Plan), Retirement (as defined in the Plan) or Termination for Cause (as defined in the Plan); (iii) one year after your termination of service due to death, Disability or Retirement; and (iv) the date and time of your Termination for Cause.

Note: To qualify for the favorable tax treatment accorded to incentive stock options, you (or, in the event of your death, your estate or designated beneficiaries) must exercise any stock options that are designated as ISOs within three months after you terminate service as a common-law employee of the Company and its affiliates for any reason other than death or disability and within one year after you terminate service as common-law employee due to your death or disability. If they are exercised later, they will be subject to tax as if they were designated as NQSOs.

Section 5. Amendment . This Certificate may be amended, in whole or in part and in any manner not inconsistent with the provisions of the Plan, at any time and from time to time, by written Certificate between the Company and you.

Section 6. Plan Provisions Control . This Certificate and the rights and obligations created hereunder shall be subject to all of the terms and conditions of the Plan. In the event of any conflict between the provisions of the Plan and the provisions of this Certificate, the terms of the Plan, which are incorporated herein by reference, shall control. Capitalized terms in this Certificate have the meaning defined in the Plan, as amended from time to time, unless stated otherwise. By signing this Certificate, you acknowledge receipt of a copy of the Plan.

A PPENDIX A TO S TOCK O PTION C ERTIFICATE

L AKE S HORE B ANCORP , I NC . 2006 S TOCK O PTION P LAN

N OTICE OF E XERCISE OF S TOCK O PTION

Use this Notice to inform Lake Shore Bancorp, Inc. that you are exercising your right to purchase shares of common stock (“Shares”) of Lake Shore Bancorp, Inc. pursuant to an option (“Option”) granted under the Lake Shore Bancorp, Inc. 2006 Stock Option Plan (“Plan”). If you are not the person to whom the Option was granted (“Option Recipient”), you must attach to this Notice proof of your right to exercise the Option granted under the Stock Option Certificate entered into between Lake Shore Bancorp, Inc. and the Option Recipient (“Certificate”). This Notice should be personally delivered or mailed by certified mail, return receipt requested to: Lake Shore Bancorp, Inc., 128 East 4 ^th Street, Dunkirk, NY 14048, Attention: Compensation Committee. The effective date of the exercise of the Option shall be the earliest date practicable following the date this Notice is received by Lake Shore Bancorp, Inc. (“Effective Date”). Except as specifically provided to the contrary herein, capitalized terms shall have the meanings assigned to them under the Plan.


OPTION INFORMATION		Identify below the Option that you are exercising by providing the following information from the Stock Option Certificate.


Name of Option Recipient:

Option Grant Date:		,		Exercise Price per share:	$ .
	(Month and Day)		(Year)


EXERCISE PRICE		Compute the Exercise Price below and select a method of payment.

Total Exercise Price

x $

= $

(No. of Shares)

(Exercise Price)

Total Exercise Price

Method of Payment


¨	I enclose a certified check, money order, or bank draft payable to the order of Lake Shore Bancorp, Inc. in the amount of	$

¨	I enclose Shares I have owned for at least six months duly endorsed for transfer to Lake Shore Bancorp, Inc. with all stamps attached and having a fair market value of*	$

	Total Exercise Price	$

*	Subject to Committee approval as an acceptable method of payment.

ISSUANCE OF CERTIFICATES

I hereby direct that the stock certificates representing the Shares purchased pursuant to section 2 above be issued to the following person(s) in the amount specified below:


Name and Address	Social Security No.	No. of Shares



	— —



	— —


WITHHOLDING ELECTIONS		For Employee Option Recipients with Non-Qualified Stock Options only. Beneficiaries should not complete.

I understand that I am responsible for the amount of federal, state and local taxes required to be withheld with respect to the Shares to be issued to me pursuant to this Notice, but that I may request Lake Shore Bancorp, Inc. to retain or sell a sufficient number of such Shares to cover the amount to be withheld. I hereby request that any taxes required to be withheld be paid in the following manner [check one]:

With a certified or bank check that I will deliver to Lake Shore Bancorp, Inc. on the day after the Effective Date of my Option exercise.

With the proceeds from a sale of Shares that would otherwise be distributed to me.

Retain shares that would otherwise be distributed to me and that have a value equal to the minimum amount required to be withheld by law.

I understand that the withholding elections I have made on this form are not binding on the Committee, and that the Committee will decide the amount to be withheld and the method of withholding and advise me of its decision prior to the Effective Date. I further understand that the Committee may request additional information or assurances regarding the manner and time at which I will report the income attributable to the distribution to be made to me. I further understand that if I have elected to have Shares sold to satisfy tax withholding, I may be asked to pay a minimal amount of such taxes in cash in order to avoid the sale of more Shares than are necessary.

COMPLIANCE WITH TAX AND SECURITIES LAWS


		Internal Use Only
		Internal Use Only

Received [ check one ]:

By Hand

By Mail Post Marked

Date of Post Mark

Authorized Signature

Date of Receipt

A PPENDIX B TO S TOCK O PTION C ERTIFICATE

L AKE S HORE B ANCORP , I NC .

2006 S TOCK O PTION P LAN

Beneficiary Designation Form


GENERAL INFORMATION	Use this form to designate the Beneficiary(ies) who will receive vested stock options outstanding to you at the time of your death.

Name of Award Recipient		Social Security Number – –

BENEFICIARY DESIGNATION	Complete sections A and B. If no percentage shares are specified, each Beneficiary in the same class (primary or contingent) shall have an equal share. If any designated Beneficiary predeceases you, the shares of each remaining Beneficiary in the same class (primary or contingent) shall be increased proportionately.

A. PRIMARY BENEFICIARY(IES). I hereby designate the following person as my primary Beneficiary under the Plan, reserving the right to change or revoke this designation at any time prior to my death:



Name	Address	Relationship	Birthdate	Share


					%



					%



					%

		Total = 100%

B. CONTINGENT BENEFICIARY(IES). I hereby designate the following person(s) as my contingent Beneficiary(ies) under the Plan to receive benefits only if all of my primary Beneficiaries should predecease me, reserving the right to change or revoke this designation at any time prior to my death:

Name	Address	Relationship	Birthdate	Share



					%



					%



					%

		Total = 100%

I understand that this Beneficiary Designation shall be effective only if properly completed and received by the Compensation Committee of Lake Shore Bancorp, Inc. prior to my death, and that it is subject to all of the terms and conditions of the Plan. I also understand that an effective Beneficiary designation revokes my prior designation(s) with respect to all outstanding Stock Options.

Your Signature

Date

_________________________________________Internal Use Only_________________________________________

This Beneficiary Designation was received by the Compensation Committee of Lake Shore Bancorp, Inc. on the date indicated.

Comments

Authorized Signature

Date

Exhibit 5.1


								Thacher Proffitt & Wood LLP
								1700 Pennsylvania Avenue, N.W.
								Suite 800
								Washington, DC 20006
								(202) 347-8400
								Fax: (202) 626-1930
								www.tpw.com

April 3, 2007

Board of Directors

Lake Shore Bancorp, Inc.

125 East Fourth Street

Dunkirk, New York 14048

Re: Registration Statement on Form S-8

Members of the Board:

We have acted as counsel for Lake Shore Bancorp, Inc., a Delaware corporation (the “Company”), in connection with the filing of a registration statement on Form S-8 under the Securities Act of 1933, as amended (“Registration Statement”) with respect to 416,587 shares of the Company’s common stock, par value $0.01 per share (the “Common Stock”), to be offered pursuant to the Lake Shore Bancorp, Inc. 2006 Stock Option Plan and the Lake Shore Bancorp, Inc. 2006 Recognition and Retention (collectively, the “Plans”).

In rendering the opinion set forth below, we do not express any opinion concerning law other than the corporate laws of the State of Delaware.

We have examined originals or copies, certified or otherwise identified, of such documents, corporate records and other instruments as we have deemed necessary or advisable for purposes of this opinion. As to matters of fact, we have examined and relied upon the Plans described above and, where we have deemed appropriate, representations or certificates of officers of the Company or public officials. We have assumed the authenticity of all documents submitted to us as originals, the genuineness of all signatures, the legal capacity of natural persons and the conformity to the originals of all documents submitted to us as copies.

Based on the foregoing, we are of the opinion that the shares of Common Stock that are being registered pursuant to the Registration Statement have been duly authorized and, when issued and paid for in accordance with the terms of the Plans, such shares will be validly issued, fully paid and non-assessable.

This opinion is given solely for the benefit of the Company and purchasers of shares under the Plan, and may not be relied upon by any person or entity, nor quoted in whole or in part, or otherwise referred to in any document without our express written consent.

Board of Directors

Lake Shore Bancorp, Inc.

April 3, 2007

Page 2

We consent to the filing of this opinion as an exhibit to the Registration Statement and to the references to our firm’s name therein.

Very truly yours,

/s/ T HACHER P ROFFITT & W OOD LLP

T HACHER P ROFFITT & W OOD LLP

Exhibit 23.1

LOGO

Consent of Independent Registered Public Accounting Firm

We consent to the incorporation by reference in this Registration Statement on Form S-8 pertaining to Lake Shore Bancorp, Inc.’s 2006 Stock Option Plan and 2006 Recognition and Retention Plan of our report dated March 19, 2007 relating to the consolidated financial statements of Lake Shore Bancorp, Inc., which report is included in the Annual Report on Form 10-K for the year ended December 31, 2006 of Lake Shore Bancorp, Inc.

/s/ Beard Miller Company LLP

Pittsburgh, Pennsylvania

March 30, 2007