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                                                                    EXHIBIT 10.1



                         [LOGO BALDWIN PIANO LETTERHEAD]
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July 29, 1997

Mr. Randy R. Marks
13729 Vista De Los Pinos
Jamul, CA 91935

Dear Randy:

         This letter agreement is to formally outline the offer of employment by
Baldwin Piano and Organ Company to employ you as Executive Vice President, Piano
Operations.

         The following is more specific information about the offer. Of course,
all of these items are subject to the details of the specific plan documents
referred to herein. If you have any questions or want more detailed information,
please feel free to contact Cindy Moeller at 576-4652.

POSITION                            You would serve as Executive Vice President,
                                    Piano Operations for the Company and would
                                    report to the Chief Executive Officer of the
                                    Company. You would be based at the Company's
                                    Corporate Offices in Loveland, Ohio.
TERM OF
EMPLOYMENT                          The term of your employment with the Company
                                    will commence on January 1, 1998 (the
                                    "Commencement Date") and shall continue
                                    through December 31, 2000 (the "Expiration
                                    Date"), unless earlier terminated by the
                                    Company or you as hereinafter provided. Upon
                                    mutual agreement between you and the
                                    Company, the term of your employment may be
                                    extended beyond the Expiration Date.
COMPENSATION

         Base Salary                Your starting annual base salary will
                                    be $215,000 (less withholdings and
                                    deductions), which will be paid monthly on
                                    the 25th of the month. The Company will
                                    review your salary annually.

         Annual Incentive           You will be entitled to participate in
                                    Baldwin's Management Incentive Plan ("MIP"),
                                    which provides an opportunity for an annual
                                    cash bonus. Pursuant to the MIP, you will be
                                    eligible for an annual incentive of 24%,
                                    30%, or 45% of your Base Salary, subject to
                                    the level of the performance of the Company.
                                    The plan runs on a fiscal year basis, and
                                    your participation will begin in 1999 based
                                    on performance of the Company for 1998. For
                                    the period from the Commencement Date
                                    through December 31, 1998, the Company will
                                    agree that your cash bonus for



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July 29, 1997
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                                    1998 will not be less than $38,700. (75% of
                                    threshold, which is 24% of your base
                                    salary.)

         Annual Incentive
         Stock Options              In 1999, you will be eligible for an annual
                                    incentive stock option grant, determined by
                                    the CEO, based on your individual
                                    contribution for fiscal 1998. 

         Special Stock
         Option Grant               On the Commencement Date, the Company will
                                    grant you a qualified option to acquire
                                    10,000 shares of the Company's common stock
                                    and a non-qualified option to acquire an
                                    additional 10,000 shares of the Company's
                                    common stock. The per share exercise price
                                    for all such options will equal the closing
                                    share price of the Company's common stock on
                                    the NASDAQ Market on the Commencement Date
                                    or, if no trades are made on such date, the
                                    next business day following such date on
                                    which trades of the Company's common stock
                                    are reported.. Your right to exercise 20% of
                                    these options will vest immediately on the
                                    Commencement Date, and an additional 20% of
                                    the options will vest on each anniversary of
                                    the Commencement Date. These options will
                                    expire on the earlier of the following: ten
                                    years from the date of the grant or three
                                    months following termination of your
                                    employment.

         Long-Term
         Incentive Plan             You will be entitled to participate in any
                                    Long-Term Incentive Plan which may be
                                    adopted by the Company.

BENEFITS                            Pursuant to the Baldwin Piano & Organ
                                    Company Group Benefits Program, as outlined
                                    in the booklet, "Your Group Benefits Plan
                                    and the Long Term Disability Highlights
                                    Summary Report" you will be entitled to the
                                    following benefits:

         Medical and
         Dental Benefits            You will be eligible to participate in the
                                    medical and dental plan on the first of the
                                    month following 90 days of employment. The
                                    current medical plan is a point-of-service
                                    plan, and you will select a primary care
                                    physician, who will direct your medical
                                    care. In 1997 the monthly employee
                                    contribution for family medical and dental
                                    coverage is $120.00. We anticipate a modest
                                    increase in employee contribution rates in
                                    1998. These premiums may be paid on a
                                    pre-tax basis through the Baldwin



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July 29, 1997
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                                    Piano & Organ Company Cafeteria Plan (the
                                    "Cafeteria Plan"). The maximum annual dental
                                    benefit is $1,000 for each family member.

                                    Co-pay for doctors' visits in the network is
                                    $12.00. There is a prescription card with a
                                    co-pay of $7.00 for generic drugs and $12.00
                                    for branded drugs. Also, there is a mail
                                    order prescription provision with a $7.00
                                    co-pay for a three-month supply for
                                    maintenance drugs.

         Flexible Spending
         Plan                       You also will be eligible under the
                                    Cafeteria Plan to participate in the
                                    flexible spending account arrangements which
                                    allow you through salary deferrals to pay
                                    certain items with pre-tax dollars. You may
                                    defer up to $2,000 annually to the
                                    Medical/Dental Reimbursement Account and up
                                    to $5,000 to the Dependent Care
                                    Reimbursement Account.

         Retirement Plan            After the prescribed waiting period, you
                                    will be eligible to participate in the
                                    Baldwin Piano & Organ Company Retirement
                                    Plan for Salaried Employees (the "Retirement
                                    Plan"). After you have been employed for 30
                                    days, you will be eligible to make salary
                                    deferral contributions to the Retirement
                                    Plan (up to a certain limit). Second, after
                                    you have been employed for one year, the
                                    Company will contribute on an annual basis
                                    to your account an amount equal to 3% of
                                    your salary, plus match your salary deferral
                                    contributions at the rate of 50% (up to a
                                    certain overall limit).

                                    In addition, Baldwin has a Nonqualified
                                    Deferred Compensation Plan, to which you
                                    also will be able to make salary deferral
                                    contributions (up to a certain limit) after
                                    30 days of employment. After one year of
                                    employment, your deferrals to this Plan will
                                    be matched at the rate of 50% (again, up to
                                    a certain overall limit).

                                    You will choose from the options available
                                    in each plan how to direct the investment of
                                    these funds.

                                    You will be 100% vested in all Company
                                    contributions after five years.


         Vacation                   You will be entitled to four weeks of paid
                                    vacation annually beginning in 1998.




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         Long-Term
         Disability                 You will be offered long-term disability at
                                    group rates.

         Life Insurance             The Company provides life insurance in an
                                    amount equal to 1 1/2 times your annual W-2
                                    earnings. This amount is adjusted annually. 

         Educational 
         Assistance                 You will be eligible for educational
                                    assistance after one year of employment.

         Relocation
         Expenses                   We provide a comprehensive relocation
                                    program, administered by Prudential
                                    Relocation that provides assistance with
                                    home marketing, home finding, closing
                                    management, and other relocation services.
                                    These are described in detail in our
                                    relocation policy, of which you have already
                                    received a copy.

                                    Our policy includes a repayment provision.
                                    If you voluntarily terminate your employment
                                    with Baldwin within twelve months of your
                                    Commencement Date, you will be required to
                                    pay up to 100% of the relocation expenses.
                                    This provision is explained in detail in the
                                    Repayment Agreement, which is attached to
                                    the Relocation Policy. You are required to
                                    sign this Repayment Agreement.
TERMINATION

         Termination
         Without Cause              The Company may terminate your employment at
                                    any time, whether or not for Cause (as
                                    "Cause" is defined below). In the event the
                                    Company terminates your employment without
                                    Cause, the Company will continue to pay you
                                    your Base Salary (less required withholdings
                                    and deductions) through the Expiration Date
                                    on a monthly basis. The Company shall have
                                    no further obligation to you beyond the
                                    above payments.

         Termination
         "For Cause"                The Company may terminate your employment at
                                    any time for Cause (as defined below)
                                    effective immediately upon written notice to
                                    you. In such event, you shall receive your
                                    Base Salary through the effective date of
                                    termination and all incentive payments
                                    earned by you but not yet paid to you prior
                                    to such date, and the Company shall have no
                                    further obligation to you. For purposes of
                                    this letter agreement, "Cause" shall mean a
                                    violation by you of the Baldwin Piano &
                                    Organ Company Corporate



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                                    Policy on Ethics and Business, and/or any
                                    acts by you against the Company amounting to
                                    fraud, intentional misrepresentation and/or
                                    embezzlement or breach of this letter
                                    agreement.
         Termination due
         to Disability              This letter agreement may be terminated, at
                                    the option of the Company or you, if during
                                    the term of your employment, you become
                                    disabled, meaning because of ill health,
                                    physical or mental disability, or for any
                                    other disability ("disability"), and you
                                    shall have been continuously unable or shall
                                    have otherwise failed to perform the
                                    essential functions of your job hereunder
                                    for 90 days, or if, during any calendar year
                                    during the term hereof because of
                                    disability, you shall have been unable or
                                    shall have otherwise failed to perform the
                                    essential functions of your job hereunder
                                    for a total period of 120 days regardless of
                                    whether or not such days are consecutive.
                                    Provided, however, that regardless of the
                                    above definition of disability, a disability
                                    may be deemed to exist regardless of your
                                    failure to perform the essential functions
                                    of your job for any specific time period, if
                                    you shall be declared by a Court having
                                    jurisdiction of that matter, or when you
                                    have been declared by any two physicians
                                    selected by the Company and acceptable to
                                    you admitted to the practice of medicine in
                                    the place where you are then domiciled. In
                                    the event of the termination of your
                                    employment due to disability, the Company
                                    will pay your monthly Base Salary through
                                    the end of month in which such termination
                                    upon disability occurs and all incentive
                                    payments earned by but not yet paid to you
                                    prior to your termination upon disability.
                                    All Stock Options granted to you as provided
                                    herein and which have vested may continue to
                                    be exercised within the applicable period
                                    provided by the Internal Revenue Code of
                                    1986, as amended, and the Company shall have
                                    no further obligation to you. This provision
                                    will be applied consistent with the
                                    Company's obligations under applicable
                                    federal and state law, including without
                                    limitation the Americans with Disabilities
                                    Act.

         Termination as a
         result of your
         Death                      Should you die during the term of this
                                    letter agreement, your employment will
                                    terminate effective on the date of your
                                    death. Your spouse or estate, as the case
                                    may be, shall be entitled to retain your
                                    salary installment for the month in which
                                    you death occurs and shall be entitled to
                                    all incentive payments earned by you but not
                                    yet paid to you prior to the date of death.
                                    All Stock Options granted to you as provided
                                    herein shall remain exercisable for its
                                    entire ten year term by the person or
                                    persons to whom



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                                    the same is transferred by will or by the
                                    applicable laws of descent and distribution.

         Termination
         By Employee                If you terminate your employment with the
                                    Company for any reason, you shall receive
                                    your Base Salary through the effective date
                                    of termination and all incentive payments
                                    earned but not yet paid to you prior to such
                                    date, and the Company shall have no further
                                    obligation to you.

         Acceleration of
         Stock Options
         Upon Termination           If the Company elects to terminate your
                                    employment without Cause, or

                                    If you elect to terminate your employment
                                    with the Company subsequent to June 30,
                                    1999, and if at the time of such voluntary
                                    termination of employment all of the
                                    following circumstances exist:

                                            (I)        no circumstances which
                                                       would constitute "Cause"
                                                       as defined herein;

                                            (ii)       You have given the CEO at
                                                       least six months prior
                                                       written notice of
                                                       termination; and

                                            (iii)      You work with the Company
                                                       in good faith to recruit
                                                       a qualified successor,
                                                       and, if recruited, to
                                                       accomplish an effective
                                                       transition;

                                    then, within ten (10) days of the effective
                                    date of termination of employment, all stock
                                    options granted to you at any time prior to
                                    January 1 of the year in which your
                                    termination of employment shall occur shall
                                    immediately vest in you and may be exercised
                                    within three months following termination of
                                    your employment.

COVENANT NOT
TO COMPETE                          At all times during the term of your
                                    employment and for a period of one year
                                    thereafter, if your employment is terminated
                                    by you for any reason or if terminated by
                                    the Company for Cause, you agree that you
                                    will not directly or indirectly enter into
                                    or in any manner take part in any business
                                    or endeavor, either as an employee, agent,
                                    independent contractor, owner



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                                    or otherwise, which directly or indirectly
                                    competes with the Company in any market in
                                    which the Company does or may do business.

                                    You agree that the covenants, restrictions
                                    and obligations set forth in this letter
                                    agreement are founded upon valuable
                                    consideration and are reasonable in duration
                                    and geographic scope.

                                    In the event of a breach or threatened
                                    breach by you of any of the covenants,
                                    restrictions, agreements and obligations set
                                    forth herein, monetary damages or the other
                                    remedies at law that may be available to the
                                    Company for such breach or threatened breach
                                    will be inadequate and, without prejudice to
                                    the Company's right to pursue any other
                                    remedies at law or in equity available to it
                                    for such breach or threatened breach,
                                    including, without limitation, the recovery
                                    of damages from you, the Company will be
                                    entitled to injunctive relief.

                                    The time period and geographical area set
                                    forth herein are each divisible and
                                    separable, and, in the event that the
                                    covenants not to compete contained herein
                                    are judicially held invalid or unenforceable
                                    as to such time period and/or geographical
                                    area, they will be valid and enforceable in
                                    such geographical area(s) and for such time
                                    period(s) which the court determines to be
                                    reasonable and enforceable. You agree that
                                    in the event any court of competent
                                    jurisdiction determines that the above
                                    covenants are invalid or unenforceable to
                                    join with the Company in requesting that
                                    court to construe the applicable provision
                                    by limiting or reducing it so as to be
                                    enforceable to the extent compatible with
                                    the then applicable law. Furthermore, any
                                    period of restriction or covenant herein
                                    stated shall not include any period of
                                    violation or period of time required for
                                    litigation to enforce such restriction or
                                    covenant.

                                    This covenant not to compete shall survive
                                    the termination of your employment and the
                                    termination of this letter agreement.

CONFIDENTIAL INFORMATION            You recognize and acknowledge that
                                    information gained by you while in the
                                    Company's employ, including without
                                    limitation that concerning the Company's
                                    customers and suppliers, and the methods,
                                    techniques, devices and operations of the
                                    Company, as they may exist from time to
                                    time, are of a confidential nature and are
                                    valuable, special and unique assets of the
                                    Company's business. You shall not during the
                                    term of, or after the termination of
                                    employment, disclose in any way any such
                                    confidential


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                                    information to any person, firm, corporation
                                    or any other operation or entity, or use the
                                    same on your own behalf, for any reason or
                                    purpose. Upon termination of employment, you
                                    shall deliver up to the Company all lists of
                                    the Company's customers and suppliers and
                                    all copies thereof, and all notes, records,
                                    memoranda, complete correspondence files and
                                    other papers, and all copies thereof,
                                    relating to the methods, techniques, devices
                                    and operations of the Company, and you do
                                    not have nor can you acquire any property
                                    right therein or claim thereto or in the
                                    underlying confidential information. This
                                    provision shall survive the termination of
                                    your employment and the termination of this
                                    letter agreement.

OTHER

         Change of
         Control Agreement          Attached to this letter is the Change of
                                    Control Agreement that has been approved by
                                    the Board of Directors for a few select,
                                    critical senior executives. This Change of
                                    Control Agreement will supersede this
                                    compensation package in the event of a
                                    change of control as defined in the Change
                                    of Control Agreement. This will give you
                                    assurance of financial protection for a
                                    period of time if the Company has a change
                                    of control and your employment is terminated
                                    either directly or constructively as a
                                    result.

         Drug Screen/
         Background Check           This letter agreement is contingent upon
                                    successful completion of a pre- employment
                                    drug screen and a background check.

         Proof of Identity          To comply with federal law, you will need
                                    you to provide the Company with appropriate
                                    proof of identity and an appropriate
                                    document that establishes employment
                                    eligibility.

         Governing Law              This letter agreement shall be governed by
                                    the laws of the State of Ohio.

         Entire Agreement           This letter agreement sets forth the entire
                                    agreement between you and the Company
                                    regarding the terms of your employment with
                                    the Company and cannot be modified except in
                                    a writing signed by the Company and you.






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         Randy, I am certainly looking forward to having you join us at Baldwin.
If the terms of this offer are acceptable to you, please indicate your agreement
by returning a signed copy of this letter to me.

                                            Sincerely,

                                            Baldwin Piano & Organ Company



                                            By: /s/ Karen L. Hendricks
                                               --------------------------------
                                            Karen L. Hendricks, Chairman, Chief
                                            Executive Officer and President

I have read, understand and agree to all of the provisions of this letter
agreement:


/s/ Randy R. Marks
--------------------------
Randy R. Marks

Date: _____________________


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