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EXHIBIT 10.5

                              EMPLOYMENT AGREEMENT

         This EMPLOYMENT AGREEMENT (the "Agreement") is made and entered into as
of the 1st day of May, 1997, by and between Goshen Savings Bank, a mutual
savings bank organized and operating under the laws of the United States and
having its executive office at 1 South Church Street, Goshen, New York 10924
(the "Bank"), and Richard C. Durland, residing at 76 Twin Oaks Drive, Campbell
Hall, New York 10916.


         WHEREAS, Mr. Durland currently serves the Bank as Executive
Vice President and Treasurer; and


         WHEREAS, in order to secure Mr. Durland's continued services for the
period hereof, the Board of Directors of the Bank (the "Board") has approved and
authorized the execution of this Agreement; and


         WHEREAS, Mr. Durland is willing to continue to make his services
available to the Bank on the terms and conditions set forth herein.

         NOW, THEREFORE, in consideration of the mutual covenants and
obligations hereinafter set forth, the parties hereto hereby agree as follows:

         1. Employment. The Bank hereby continues the employment of Mr. Durland
as its Executive Vice President and Treasurer, and Mr. Durland hereby accepts
such continued employment, during the period and upon the terms and conditions
set forth in this

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Agreement. During said period, in the event of a conversion of the Bank from a
mutual savings bank to a stock form of organization (the "Conversion"), if
elected, Mr. Durland also agrees to serve as the Executive Vice President and
Treasurer of the parent corporation of the Bank.


         2. Employment Period. The terms and conditions of this Agreement shall
be and remain in effect during the period of employment established under this
section 2 (the "Employment Period").


         (a) The Employment Period shall be for an initial term of three years
beginning on the date of this Agreement and ending on the third anniversary date
of this Agreement, plus such extensions, if any, as are approved by the Board
pursuant to section 2(b).

         (b) Prior to the first anniversary of the date of this Agreement and
each anniversary date thereafter (each, an "Anniversary Date"), the Board shall
review the terms of this Agreement and Mr. Durland's performance of services
hereunder and may, absent objection from Mr. Durland, approve a one year
extension of the Employment Period. In such event, the Employment Period shall
be extended to the third anniversary of the Anniversary Date immediately
succeeding such Board review (the "Extension Ending Anniversary Date").



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         (c) If, prior to the date on which the Employment Period would end
pursuant to section 2(a) or (b) of this Agreement, a Change in Control (as
defined in section 13 of this Agreement) occurs and the Bank is not subject to
rules and regulations of the Office of Thrift Supervision (the "OTS"), then the
Employment Period shall be extended through and including the third anniversary
of the earliest date after the effective date of such Change in Control on which
either the Bank or Mr. Durland elects, by written notice pursuant to section
2(d) of this Agreement to the non-electing party, to discontinue the Employment
Period; provided, however, that this section shall not apply in the event that,
prior to the Change in Control, Mr. Durland has provided written notice to the
Bank of his intent to discontinue the Employment Period.


         (d) The Bank or Mr. Durland may, at any time by written notice given to
the other, elect to terminate this Agreement. Any such notice given by the Bank
shall be accompanied by a certified copy of a resolution, adopted by the
affirmative vote of a majority of the entire membership of the Board at a
meeting of the Board duly called and held, authorizing the giving of such
notice.


         3. Duties. During the Employment Period, Mr. Durland shall:


         (a) except to the extent allowed under section 7 of this Agreement,
devote his full business time and attention to the business and affairs of the
Bank, its parent and subsidiary

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corporations (if any), and use his best efforts to advance their
interests;

         (b) serve as Executive Vice President and Treasurer of the Bank and its
parent corporation and as an officer of any of its subsidiaries if elected to
serve in such positions;

         (c) have such functions, duties and responsibilities not inconsistent
with his title and office as may be assigned to him by or under the authority of
the Bank's Chief Executive Officer and/or the Board, in accordance with the
Organization Certificate, By-laws, applicable Statutes and Regulations, custom
and practice of the Bank as in effect on the date this Agreement is made. Mr.
Durland shall have such authority as is necessary or appropriate to carry out
his assigned duties. Mr. Durland shall report to and be subject to direction and
supervision by the Bank's Chief Executive Officer and the Board; and

         (d) none of the functions, duties and responsibilities to be performed
by Mr. Durland pursuant to this Agreement shall be deemed to include those
functions, duties and responsibilities performed by Mr. Durland in his capacity
as director of the Bank.

         4. Compensation; Salary and Bonus.


         (a) In consideration for services rendered by Mr. Durland under this
Agreement, the Bank shall pay to Mr. Durland a salary at an annual rate equal
to:


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         (i) during the twelve month period beginning on May 1, 1997 and ending
on April 30, 1998, no less than $98,280;

         (ii) during each twelve month period that begins after April 30, 1998,
such amount as the Board may, in its discretion, determine, but in no event less
than the rate in effect for the prior twelve month period;

         (iii) for each twelve month period that begins on or after a Change in
Control, the product of Mr. Durland's annual rate of salary in effect
immediately prior to such twelve-month period, multiplied by the greater of:


                           (A) the quotient of (1) the U.S. Department of Labor
                  Consumer Price Index for All Urban Consumers
                  (N.Y.-Northeastern N.J.) for October of the immediately
                  preceding calendar year, divided by (2) the U.S. Department of
                  Labor Consumer Price Index for All Urban Consumers
                  (N.Y.-Northeastern N.J.) for October of the second preceding
                  calendar year; and

                           (B) the quotient of (1) the average annual rate of
                  salary, determined as of the first day of such calendar year,
                  of the officers of the Bank (other than Mr. Durland) who are
                  assistant vice presidents or more senior officers, divided by
                  (2) the average annual rate of salary, determined as of the
                  first day of the immediately preceding calendar year, of the
                  officers of

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                  the Bank (other than Mr. Durland) who are assistant
                  vice presidents or more senior officers.

         (b) The salary payable under section 4(a) shall be paid in
approximately equal installments in accordance with the Bank's customary payroll
practices. Nothing in this section 4 shall be construed as prohibiting the
payment to Mr. Durland of a salary in excess of that prescribed under section
4(a) or of a bonus of additional cash or non-cash compensation, to the extent
that such payment is duly authorized by or under the authority of the Board.

         (c) No portion of the compensation paid to Mr. Durland pursuant to this
Agreement shall be deemed to be compensation received by him in his capacity as
a director of the Bank.

         5. Employee Benefits Plans and Programs; Other Compensation. Except as
otherwise provided in this Agreement, Mr. Durland shall be treated as an
employee of the Bank and be entitled to participate in and receive benefits
under the Bank's Retirement Plan, group life and health (including
hospitalization, medical, major medical and dental) and disability insurance
plans, and such other employee benefit plans and programs, including but not
limited to any long-term or short-term incentive compensation plans or programs
(whether or not employee benefit plans or programs), as the Bank may maintain
from time to time, in accordance with the terms and conditions of such employee
benefit plans and programs and compensation plans and programs and with

                                        6

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the Bank's customary practices. Following a Change in Control, all such benefits
to Mr. Durland shall be continued on terms and conditions substantially
identical to, and in no event less favorable than, those in effect prior to the
Change in Control. Nothing in this Agreement will reduce benefits provided under
the Bank's Employee Handbook, Revised Edition January 1, 1997, notwithstanding
any future reductions which might be made to the benefits provided in such
Employee Handbook.

         6. Conversion Benefits. In the event of a Conversion, the Bank will
provide, or cause to be provided, to Mr. Durland in connection with such
Conversion, stock-based compensation and benefits, including, without
limitation, stock options, restricted stock awards, and participation in
tax-qualified stock bonus plans which, in the aggregate, are either (a) accepted
by Mr. Durland in writing as being satisfactory for purposes of this Agreement
or (b) in the written, good faith opinion of a nationally recognized executive
compensation consulting firm selected by the Bank and satisfactory to Mr.
Durland, whose agreement shall not be unreasonably withheld, are no less
favorable than the stock-based compensation and benefits usually and customarily
provided to similarly situated executives of similar financial institutions in
connection with similar transactions.

         7. Board Memberships and Personal Activities. If elected, Mr. Durland
will continue to serve on the Board and, in the event

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of a Conversion, on the board of directors of any parent corporation of the
Bank. In addition, Mr. Durland may also serve as a member of the board of
directors of such business, community and charitable organizations as he may
disclose to the Board from time to time, and he may engage in personal business
and investment activities for his own account; provided, however, that such
service and personal business and investment activities shall not (a) materially
interfere with the performance of his duties under this Agreement, and (b)
involve entities which either compete with the Bank or may reasonably be
expected to negatively impact on the Bank's standing and reputation in the
community it serves.


         8. Working Facilities and Expenses. Mr. Durland's principal place of
employment shall be at the Bank's executive offices. The Bank shall provide Mr.
Durland, at such principal place of employment, with support services and
facilities suitable to his position with the Bank and necessary or appropriate
in connection with the performance of his assigned duties under this Agreement.
The Bank shall reimburse Mr. Durland for his ordinary and necessary business
expenses, including, without limitation, fees for memberships in such clubs and
organizations as Mr. Durland and the Bank shall mutually agree are necessary and
appropriate for business purposes, and travel and entertainment expenses
incurred in connection with the performance of his duties under this Agreement
upon presentation to the Bank of itemized accounts of such expenses in such form
as the Bank may reasonably require.

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Mr. Durland shall be entitled to no less than four (4) weeks of
paid vacation during each year in the Employment Period.

         9. Termination Giving Rise to Severance Benefits.

         (a) The Bank shall provide to Mr. Durland the benefits and pay him the
amounts provided under section 9(b) of this Agreement in the event that Mr.
Durland's employment with the Bank shall terminate during the Employment Period
for reasons other than:

         (i) a Termination for Cause (within the meaning of section
12(a) of this Agreement);

         (ii) a voluntary resignation by Mr. Durland other than a Resignation
for Good Reason (within the meaning of section 12(b) of this Agreement);

         (iii) a termination on account of Mr. Durland's death; or


         (iv) a termination after both of the following conditions exist: (A)
Mr. Durland has been absent from the full-time service of the Bank on account of
his Disability (as defined in section 11(c) of this Agreement) for at least six
consecutive months; and (B) Mr. Durland shall have failed to return to work in
the full-time service of the Bank within thirty days after written notice
requesting such return is given to Mr. Durland by the Bank.

         (b) In the event that Mr. Durland's employment with the Bank shall
terminate under circumstances described in section 9(a) of

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this Agreement, the following benefits and amounts shall be paid
or provided to Mr. Durland:

         (i) his earned but unpaid salary as of the date of the termination of
his employment with the Bank, payable when due but in no event later than thirty
(30) days following his termination of employment with the Bank;

         (ii) the benefits, if any, to which Mr. Durland and his family and
dependents are entitled as a former officer/employee, or family or dependents of
a former officer/employee, under the employee benefit plans and programs and
compensation plans and programs maintained for the benefit of the Bank's
officers and employees, in accordance with the terms of such plans and programs
in effect on the date of his termination of employment, or if his termination of
employment occurs after a Change in Control, on the date of his termination of
employment or on the date of such Change in Control, whichever results in more
favorable benefits as determined by Mr. Durland, with credit being given for
additional years of service and age to the then current Extension Ending
Anniversary Date for purposes of determining eligibility and benefits for any
plan and program where age and service are relevant factors;


         (iii) payment for all unused vacation days and floating holidays in the
year in which his employment is terminated, at his highest annual rate of salary
for such year;


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         (iv) continued group life, health (including hospitalization, medical,
major medical and dental) and disability insurance benefits in addition to that
provided pursuant to section 9(b)(ii) of this Agreement, to the extent necessary
after taking into account coverage provided by any subsequent employer, to
provide Mr. Durland and his family and dependents, until the then current
Extension Ending Anniversary Date, with coverage identical to and in any event
no less favorable than the coverage to which they would have been entitled under
such plans (as in effect on the date of his termination of employment, or, if
his termination of employment occurs after a Change in Control, on the date of
his termination of employment or during the one-year period ending on the date
of such Change in Control, whichever results in more favorable benefits as
determined by Mr. Durland) if he had continued working for the Bank until the
then current Extension Ending Anniversary Date at the highest annual rate of
compensation (assuming, if a Change in Control has occurred, that the annual
increases under section 4(a)(iii) would apply) under the Agreement;

         (v) within thirty days following his termination of employment with the
Bank, a lump sum payment in an amount equal to the present value of the total
salary and bonuses that Mr. Durland would have earned if he had worked for the
Bank until the then current Extension Ending Anniversary Date at the highest
annual rate of salary (assuming, if a Change in Control has

                                       11

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occurred, that the annual increases under section 4(a)(iii) would apply) and the
highest bonus (calculated by applying the highest ratio of bonus to salary
received by Mr. Durland during the previous five years to the salary used for
the calculation of the lump sum payment under this section 9(b)(v)), with such
present value to be determined by using a discount rate of six percent per
annum, compounded, in the case of salary, with the frequency corresponding to
the Bank's regular payroll periods with respect to its officers, and, in the
case of bonus, annually;

         (vi) within thirty days following his termination of employment with
the Bank, a lump sum payment in an amount equal to the excess, if any, of (A)
the present value of the benefits to which he would be entitled under any
defined benefit plans maintained by, or covering employees of, the Bank
(including any "excess benefit plan" within the meaning of section 3(36) of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"), or other
special or supplemental plan) as in effect on the date of his termination, if he
had worked for the Bank until the then current Extension Ending Anniversary Date
at the highest annual rate of compensation (assuming, if a Change in Control has
occurred, that the annual increases under section 4(a)(iii) would apply) under
this Agreement and been fully vested in such plan or plans, such benefits to be
determined as of the date of termination of employment by adding to the service
actually recognized under such plans an additional period equal to the time
remaining until the then current Extension Ending

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Anniversary Date and by adding to the compensation recognized under such plans
for the year in which termination of employment occurs all amounts payable under
sections 9(b)(i), (v) and (viii), over (B) the present value of the benefits to
which he is actually entitled under any such plans maintained by, or covering
employees of, the Bank as of the date of his termination with such present
values to be determined by using a discount rate of six percent per annum,
compounded monthly, and the mortality tables prescribed under section 72 of the
Internal Revenue Code of 1986 ("Code");

         (vii) within thirty days following his termination of employment with
the Bank, a lump sum payment in an amount equal to the excess, if any, of (A)
the present value of the benefits attributable to the Bank's contribution to
which he would be entitled under any defined contribution plans maintained by,
or covering employees of, the Bank (including any "excess benefit plan" within
the meaning of section 3(36) of ERISA, or other special or supplemental plan) as
in effect on the date of his termination, if he had worked for the Bank until
the then current Extension Ending Anniversary Date at the highest annual rate of
compensation (assuming, if a Change in Control has occurred, that the annual
increases under section 4(c) would apply) under the Agreement, and made the
maximum amount of employee contributions, if any, required or permitted under
such plan or plans, and been eligible for the highest rate in matching
contributions under such plan or plans during the time remaining until the then

                                       13

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current Extension Ending Anniversary Date which is prior to Mr. Durland's
termination of employment with the Bank, and been fully vested in such plan or
plans, over (B) the present value of the benefits attributable to the Bank's
contributions to which he is actually entitled under such plans as of the date
of his termination of employment with the Bank, with such present values to be
determined by using a discount rate of six percent per annum, compounded with
the frequency corresponding to the Bank's regular payroll periods with respect
to its officers;

         (viii) the payments that would have been made to Mr. Durland under any
incentive compensation plan maintained by, or covering employees of, the Bank
(other than bonus payments to which section 9(b)(v) of this Agreement is
applicable) if he had continued working for the Bank until the then current
Extension Ending Anniversary Date and had earned an incentive award in each
calendar year that ends during the time remaining until the then current
Extension Ending Anniversary Date in an amount equal to the product of (A) the
maximum percentage rate of compensation at which an award was ever available to
Mr. Durland under such incentive compensation plan, multiplied by (B) the
compensation that would have been paid to Mr. Durland during each calendar year
at the highest annual rate of compensation (assuming, if a Change in Control has
occurred, that the annual increases under section 4(a)(iii) would apply) under
the Agreement, such payments to be made at the same time and in the same manner
as payments are made to other officers of the Bank pursuant to the terms of

                                       14

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such incentive compensation plan; provided, however, that payments under this
section 9(b)(viii) shall not be made to Mr. Durland for any year on account of
which no payments are made to any of the Bank's officers under any such
incentive compensation plan; and

         (ix) the benefits to which Mr. Durland is entitled under the Bank's
Supplemental Executive Retirement Plan (or other excess benefits plan within the
meaning of section 3(36) of ERISA or other special or supplemental plan) shall
be paid to him in a lump sum, with such lump sum to be computed using the
mortality tables under the Bank's tax-qualified pension plan and a discount rate
of six percent per annum. The payments specified in this section 9(b)(ix) shall
be made within thirty days after the date of Mr. Durland's election, and if the
amount may be increased by a subsequent Change in Control, any additional
payment shall be made within thirty days of such Change in Control.

         (c) Mr. Durland shall not be required to mitigate the amount of any
payment provided for in this section 9 by seeking other employment or otherwise,
nor shall the amount of any payment or benefit provided for in this section 9 be
reduced by any compensation earned by Mr. Durland as the result of employment by
another employer, by retirement benefits, by offset against any amount claimed
to be owed by Mr. Durland to the Bank or the parent corporation of the Bank, or
otherwise except as specifically provided in this Agreement. The parties hereto
agree

                                       15

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that the damages which may be incurred by Mr. Durland as a consequence of
termination of employment are not capable of accurate measurement as of the date
this Agreement is made and that the benefits and payments provided for in this
Agreement constitute a reasonable estimate under the circumstances of all
damages that would be sustained as a consequence of any such termination of
employment, other than damages arising under or out of any stock option,
restricted stock or other non-qualified stock acquisition or investment plan or
program, it being understood and agreed that this Agreement does not determine
the measurement of damages under any such plan or program in respect of any
termination of employment.

         10. Termination Without Severance Benefits. In the event that Mr.
Durland's employment with the Bank shall terminate during the Employment Period
on account of (a) Termination for Cause (within the meaning of section 12(a) of
this Agreement); or (b) voluntary resignation by Mr. Durland other than a
Resignation for Good Reason (within the meaning of section 12(b) of this
Agreement) then the Bank shall have no further obligations under this Agreement,
other than for the payment of the amounts and provision of the benefits under
sections 9(b)(i), (ii) and (iii) of this Agreement.

         11. Death and Disability.


         (a) If Mr. Durland's employment is terminated by reason of
Mr. Durland's death during the Employment Period, this Agreement

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shall terminate without further obligations to Mr. Durland's legal
representatives under this Agreement, other than for payment of the amounts and
provision of the benefits under sections 9(b) (i), (ii) and (iii) including the
extension of health, hospitalization and dental benefits to spouses, eligible
dependents as well as the survivor, providing the eligibility rules are met in
accordance with the Bank's Employee Handbook, Revised Edition January 1, 1997,
page 7; provided, however, that if Mr. Durland dies during the Employment
Period, his designated beneficiary(ies) shall receive a death benefit, payable
through life insurance or otherwise, which is the equivalent on a net after-tax
basis of the death benefit payable under a term life insurance policy, with a
stated death benefit of two times Mr. Durland's then current salary under
section 4 of this Agreement.

         (b) If Mr. Durland's employment is terminated by reason of Mr.
Durland's Disability as defined in section 11(c) during the Employment Period,
this Agreement shall terminate without further obligations to Mr. Durland, other
than for payment of the amounts and provision of the benefits under sections
9(b) (i), (ii) and (iii) including the extension of health, hospitalization and
dental benefits to spouses, eligible dependents as well as the survivor,
providing the eligibility rules are met in accordance with the Bank's Employee
Handbook, Revised Edition January 1, 1997, page 7; provided, however, that in
the event of Mr. Durland's Disability during the Employment Period, the Bank
will

                                       17

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pay to him a lump sum amount equal to two times his then current salary under
section 4 of this Agreement.

         (c) For purposes of this Agreement, "Disability" shall be defined in
accordance with the terms of the Bank's long term disability policy.

         (d) Payments under this section 11 shall be made within thirty days
after Mr. Durland's death or disability.

         12. Definition of Termination for Cause and Resignation for Good
Reason.

         (a) Mr. Durland's termination of employment with the Bank shall be
deemed a "Termination for Cause" if such termination occurs for "cause," which,
for purposes of this Agreement shall mean personal dishonesty, incompetence,
willful misconduct, 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 any material breach of any provision of this Agreement, in
each case as measured against standards generally prevailing at the relevant
time in the savings and community banking industry; provided, however, that Mr.
Durland shall not be deemed to have been discharged for cause unless and until
he shall have received a written notice of termination from the Board,
accompanied by a resolution duly adopted by affirmative vote of a majority of
the entire Board at

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a meeting called and held for such purpose (after reasonable notice to Mr.
Durland and a reasonable opportunity for Mr. Durland to make oral and written
presentations to the members of the Board, on his own behalf, or through a
representative, who may be his legal counsel, to refute the grounds for the
proposed determination) finding that, in the good faith opinion of the Board,
grounds exist for discharging Mr. Durland for cause.

         (b) Mr. Durland's termination of employment with the Bank shall be
deemed a Resignation for Good Reason if such termination occurs following any
one or more of the following events:

         (i) (A) the assignment to Mr. Durland of any duties inconsistent with
Mr. Durland's status as Executive Vice President and Treasurer of the Bank; or
(B) a substantial adverse alteration in the nature or status of Mr. Durland's
responsibilities from those in effect immediately prior to the alteration; or
(C) any Change in Control described in section 13 followed, within one year, by
notice pursuant to Section 2(d).

         (ii) a reduction by the Bank in Mr. Durland's salary as in effect on
the date this Agreement is made or as the same may have been increased from time
to time by the Board, unless such reduction was mandated at the initiation of
any regulatory authority having jurisdiction over the Bank;

         (iii) the relocation of the Bank's executive offices to a location
outside of Orange County or the Bank's requiring Mr.

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Durland to be based anywhere other than the Bank's executive offices except for
required travel on the Bank's business to an extent substantially consistent
with Mr. Durland's business travel obligations at the date this Agreement is
made;

         (iv) the failure by the Bank, without Mr. Durland's consent, to pay to
Mr. Durland, within seven days of the date when due, (A) any portion of his
compensation, or (B) any portion of an installment of deferred compensation
under any deferred compensation program of the Bank, which failure is not
inadvertent and immaterial and which is not promptly cured by the Bank after
notice of such failure is given to the Bank by Mr. Durland;

         (v) the failure by the Bank to continue in effect any compensation plan
in which Mr. Durland participates which is material to his total compensation,
including but not limited to the Bank's Retirement Plan or any substitute plans
unless an equitable arrangement (embodied in an ongoing substitute or
alternative plan) has been made with respect to such plan, or the failure by the
Bank to continue his participation therein (or in such substitute or alternative
plan) on a basis not materially less favorable, both in terms of the amount of
benefits provided and the level of his participation relative to other
participants, unless such failure is the result of action mandated at the
initiation of any regulatory authority having jurisdiction over the Bank;

                                       20

<PAGE>




         (vi) the failure by the Bank to continue to provide Mr. Durland with
benefits substantially similar to those enjoyed by Mr. Durland under the Bank's
Retirement Plan or under any of the Bank's life, health (including
hospitalization, medical, major medical and dental), and disability insurance
benefits, in which Mr. Durland is participating, or the taking of any action by
the Bank which would directly or indirectly materially reduce any of such
benefits or deprive Mr. Durland of the number of paid vacation days to which he
is entitled, on the basis of years of service with the Bank, rank or otherwise,
in accordance with the Bank's normal vacation policy, unless such failure is the
result of action mandated at the initiation of any regulatory authority having
jurisdiction over the Bank;

         (vii) the failure of the Bank to obtain a satisfactory agreement from
any successor to assume and agree to perform this Agreement, as contemplated in
section 15(a) of this Agreement;

         (viii) any purported termination of employment by the Bank which is not
effected pursuant the provisions of section 12(a) regarding Termination for
Cause or on account of Disability;

         (ix) a material breach of this Agreement by the Bank, which
the Bank fails to cure within thirty days following written
notice thereof from Mr. Durland;


                                       21

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         (x) a requirement that Mr. Durland report to any person or group other
than the Bank's Chief Executive Officer, the Board or an Executive Committee
thereof.

         13. Definition of Change in Control. For purposes of this Agreement, a
Change in Control of the Bank shall mean:
         (a) the occurrence of any event upon which any "person" (as such term
is used in sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as
amended (the "1934 Act")), other than (i) GSB Financial Corporation; (ii) a
trustee or other fiduciary holding securities under an employee benefit plan
maintained for the benefit of employees of the Bank; (iii) a corporation owned,
directly or indirectly, by the stockholders of the Bank in substantially the
same proportions as their ownership of stock of the Bank; or (iv) Clifford E.
Kelsey, Jr. or Mr. Durland, or any group otherwise constituting a person in
which Clifford E. Kelsey, Jr. or Mr. Durland is a member, becomes the
"beneficial owner" (as defined in Rule 13d-3 promulgated under the 1934 Act),
directly or indirectly, of securities issued by the Bank representing 25% or
more of the combined voting power of all of the Bank's then outstanding
securities; or

         (b) the occurrence of any event upon which the individuals who on the
date this Agreement is made are members of the Board, together with individuals
(other than any individual designated by a person who has entered into an
agreement with the Bank to effect a transaction described in section 13(a) or
13(c) of this

                                       22

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Agreement) whose election by the Board or nomination for election by the Bank's
stockholders was approved by the affirmative vote of at least two-thirds of the
members of Board then in office who were either members of the Board on the date
this Agreement is made or whose nomination or election was previously so
approved cease for any reason to constitute a majority of the members of the
Board, but excluding, for this purpose, any such individual whose initial
assumption of office is in connection with an actual or threatened election
contest relating to the election of directors of the Bank (as such terms are
used in Rule 14a-11 of Regulation 14A promulgated under the 1934 Act); or

         (c) the shareholders of the Bank approve either:

                  (i) a merger or consolidation of the Bank with any other
corporation, other than a merger or consolidation following which both of the
following conditions are satisfied:

                           (A) either (A) the members of the Board of the Bank
                  immediately prior to such merger or consolidation constitute
                  at least a majority of the members of the governing body of
                  the institution resulting from such merger or consolidation;
                  or (B) the shareholders of the Bank own securities of the
                  institution resulting from such merger or consolidation
                  representing eighty percent or more of the combined voting
                  power of all such securities then outstanding in substantially
                  the same proportions as their ownership of voting

                                       23

<PAGE>



                  securities of the Bank before such merger or
                  consolidation; and

                           (B) the entity which results from such merger or
                  consolidation expressly agrees in writing to assume and
                  perform the Bank's obligations under this Agreement; or

         (ii) a plan of complete liquidation of the Bank or an agreement for the
sale or disposition by the Bank of all or substantially all of its assets; and

         (d) any event which would be described in sections 13(a), (b) or (c) if
the term "Parent Corporation of the Bank" were substituted for the term "Bank"
therein. Such an event shall be deemed to be a Change in Control under the
relevant provision of sections 13(a), (b) or (c).

It is understood and agreed that more than one Change in Control may occur at
the same or different times during the Employment Period and that the provisions
of this Agreement shall apply with equal force and effect with respect to each
such Change in Control.

         14. No Effect on Employee Benefit Plans or Programs. Except as
expressly provided in this Agreement, the termination of Mr. Durland's
employment during the Employment Period or thereafter, whether by the Bank or by
Mr. Durland, shall have no effect on the rights and obligations of the parties
hereto under the Bank's Retirement Plan, group life, health (including
hospitalization,

                                       24

<PAGE>



medical, major medical and dental), and disability insurance plans or such other
employee benefit plans or programs, or compensation plans or programs (whether
or not employee benefit plans or programs) and, following the conversion of the
Bank to stock form, any stock option and appreciation rights plan, employee
stock ownership plan and restricted stock plan, as may be maintained by, or
cover employees of, the Bank from time to time.

         15. Successors and Assigns.

         (a) The Bank shall require any successor (whether direct or indirect,
by purchase, merger, consolidation or otherwise) to all or substantially all of
the business and/or assets of the Bank to expressly assume and agree to perform
this Agreement in the same manner and to the same extent that the Bank would be
required to perform it if no such succession had taken place. Failure of the
Bank to obtain such assumption and agreement prior to the effectiveness of any
such succession shall be deemed to constitute a material breach of the Bank's
obligations under this Agreement.

         (b) This Agreement will inure to the benefit of and be binding upon Mr.
Durland, his legal representatives and testate or intestate distributees, and
the Bank, their respective successors and assigns, including any successor by
merger or consolidation or a statutory receiver or any other person or firm or
corporation to which all or substantially all of the

                                       25

<PAGE>



respective assets and business of the Bank may be sold or
otherwise transferred.

         16. Notices. Any communication required or permitted to be given under
this Agreement, including any notice, direction, designation, consent,
instruction, objection or waiver, shall be in writing and shall be deemed to
have been given at such time as it is delivered personally, or five days after
mailing if mailed, postage prepaid, by registered or certified mail, return
receipt requested, addressed to such party at the address listed below or at
such other address as one such party may by written notice specify to the other
party:

         If to Mr. Durland:

         Mr. Richard C. Durland
         76 Twin Oaks Drive
         Campbell Hall,, New York 10916

         If to the Bank:

         Goshen Savings Bank
         1 South Church Street
         Goshen, NY 10924
            Attention: The President

         With a copy to:

         Serchuk & Zelermyer, LLP
         81 Main Street
         White Plains, NY 10601
            Attention: Ivan Serchuk, Esq.


         17. Enforcement Costs and Attorneys' Fees. The Bank shall pay to or on
behalf of Mr. Durland all reasonable costs, including legal fees, incurred by
him in connection with or arising out of his consultation with legal counsel or
in

                                       26

<PAGE>



connection with or arising out of any action, suit or proceeding in which he may
be involved, as a result of his efforts, in good faith, to defend or enforce the
terms of this Agreement, provided that Mr. Durland shall have (a) proceeded in
accordance with section 24 of this Agreement and (b) substantially prevailed on
the merits pursuant to a judgment, decree or order of a court of competent
jurisdiction or of an arbitrator in an arbitration proceeding, or in a
settlement; provided, further, that this section 17 shall not obligate the Bank
to pay costs and legal fees on behalf of Mr. Durland under this Agreement in
excess of reasonable attorney fees. For purposes of this Agreement, any
settlement agreement which provides for payment of any amounts in settlement of
the Bank's obligations hereunder shall be conclusive evidence of Mr. Durland's
entitlement to payments under this section, and any such payments shall be in
addition to amounts payable pursuant to such settlement agreement, unless such
settlement agreement expressly provides otherwise.

         18. Severability. A determination that any provision of this Agreement
is invalid or unenforceable shall not affect the validity or enforceability of
any other provision hereof.

         19. Waiver. Failure to insist upon strict compliance with any of the
terms, covenants or conditions hereof shall not be deemed a waiver of such term,
covenant, or condition. A waiver of any provision of this Agreement must be made
in writing, designated as a waiver, and signed by the party against whom its

                                       27

<PAGE>



enforcement is sought. Any waiver or relinquishment of such right or power at
any one or more times shall not be deemed a waiver or relinquishment of such
right or power at any other time or times.

         20. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, and all of which shall
constitute one and the same Agreement.

         21. Governing Law. This Agreement shall be governed by and construed
and enforced in accordance with the laws of the State of New York, without
reference to conflicts of law principles.

         22. Headings and Construction. The headings of sections in this
Agreement are for convenience of reference only and are not intended to qualify
the meaning of any section. Any reference to a section number shall refer to a
section of this Agreement, unless otherwise stated. Any reference to the term
"Board" shall mean the Board of Trustees of the Bank while the Bank is a mutual
savings bank and the Board of Directors of the Bank while the Bank is a stock
savings bank. Any reference to the term "Bank" shall mean the Bank in its mutual
form prior to the Conversion and in its stock form on and after the Conversion.
If the Bank does not convert to stock form, any reference to the Bank's being a
stock savings bank shall have no effect.

         23. Entire Agreement; Modifications. This instrument contains the
entire agreement of the parties relating to the subject matter hereof, and
supersedes in its entirety any and all

                                       28

<PAGE>



prior agreements, understandings or representations relating to the subject 
matter hereof between the Bank and Mr. Durland. No modifications of this
Agreement shall be valid unless made in writing and signed by the parties 
hereto.

         24. Arbitration Clause. 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 in Middletown, New York, in
accordance with the rules of the American Arbitration Association then in
effect. Judgment may be entered on the arbitrators' award in any court having
jurisdiction; the expense of such arbitration shall be borne by the Bank.

         25. Required Regulatory Provisions. The following provisions are
included for the purposes of complying with various laws, rules and regulations
applicable to the Bank:

         (a) Notwithstanding anything herein contained to the contrary, in no
event shall the aggregate amount of compensation payable to Mr. Durland under
section 9(b) hereof (exclusive of amounts described in section 9(b)(i) and (ix))
exceed three times Mr. Durland's average annual total compensation for the last
five consecutive calendar years to end prior to his termination of employment
with the Bank (or for his entire period of employment with the Bank if less than
five calendar years).


                                       29

<PAGE>



         (b) Notwithstanding anything herein contained to the contrary, Mr.
Durland shall have no right to receive compensation or other benefits for any
period after termination for cause.


         (c) Notwithstanding anything herein contained to the contrary, any
payments to Mr. Durland by the Bank, whether pursuant to this Agreement or
otherwise, are subject to and conditioned upon their compliance with section
18(k) of the Federal Deposit Insurance Act (the "FDI Act"), 12 U.S.C. Section
1828(k), and any regulations promulgated thereunder.


         (d) Notwithstanding anything herein contained to the contrary, if Mr.
Durland is suspended from office and/or temporarily prohibited from
participating in the conduct of the affairs of the Bank pursuant to a notice
served under section 8(e)(3) or 8(g)(1) of the FDI Act, 12 U.S.C. Section
1818(e)(3) or 1818(g)(1), the Bank's obligations under this Agreement shall be
suspended as of the date of service of such notice, unless stayed by appropriate
proceedings. If the charges in such notice are dismissed, the Bank, in its
discretion, may (i) pay to Mr. Durland all or part of the compensation withheld
while the Bank's obligations hereunder were suspended and (ii) reinstate, in
whole or in part, any of the obligations which were suspended.

         (e) Notwithstanding anything herein contained to the contrary, if Mr.
Durland 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 FDI Act, 12

                                       30

<PAGE>



U.S.C. Section 1818(e)(4) or (g)(1), all obligations of the Bank under this
Agreement shall terminate as of the effective date of the order, but vested
rights and obligations of the Bank and Mr.
Durland shall not be affected.

         (f) Notwithstanding anything herein contained to the contrary, if the
Bank is in default (within the meaning of section 3(x)(1) of the FDI Act, 12
U.S.C. Section 1813(x)(1)), all obligations of the Bank under this Agreement
shall terminate as of the date of default, but vested rights and obligations of
the Bank and Mr. Durland shall not be affected.

         (g) Notwithstanding anything herein contained to the contrary, all
obligations of the Bank hereunder shall be terminated, except to the extent that
a continuation of this Agreement is necessary for the continued operation of the
Bank: (i) by the Director of the OTS or his designee or the Federal Deposit
Insurance Corporation ("FDIC"), 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 FDI Act, 12 U.S.C. Section 1823(c); (ii) by the Director of
the OTS or his designee at the time such Director or designee approves a
supervisory merger to resolve problems related to the operation of the Bank or
when the Bank is determined by such Director to be in an unsafe or unsound
condition. The vested rights and obligations of the parties shall not be
affected.


                                       31

<PAGE>


If and to the extent that any of the foregoing provisions shall cease to be
required by applicable law, rule or regulation, the same shall become
inoperative as though eliminated by formal amendment of this Agreement.


         IN WITNESS WHEREOF, the Bank has caused this Agreement to be executed
and Mr. Durland has hereto set his hand, all as of the day and year first above
written.

                                           /s/ Richard C. Durland
                                           ------------------------------------
                                               RICHARD C. DURLAND


WITNESS:



/s/ Jenny Ford



                                        GOSHEN SAVINGS BANK



                                        By /s/ Clifford E. Kelsey, Jr.
                                           ------------------------------------

ATTEST:



/s/ Jenny Ford
-------------------------
                                       32