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Exhibit 10.6

                              EMPLOYMENT AGREEMENT

         This EMPLOYMENT AGREEMENT (the "Agreement") is made and entered into as
of the 1st day of May, 1997, by and between GSB Financial Corporation, a
corporation organized and operating under the laws of the State of Delaware and
having an office at 1 South Church Street, Goshen, New York 10924 (the
"Company"), and Richard C. Durland, residing at 76 Twin Oaks Drive, Campbell
Hall, New York 10916.


         WHEREAS, Mr. Durland currently serves the Company 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 Company (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 Company on the terms and conditions set
forth herein; and

         WHEREAS, on or about May 1, 1997 Mr. Durland and Goshen
Savings Bank (the "Bank") entered into an Employment Agreement
(the "Bank Employment Agreement"); and

         WHEREAS, it is contemplated that on or about June 30, 1997, the Company
will become a savings and loan holding company of which the Bank will be a
wholly owned subsidiary.


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

         1. Employment. The Company 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 Agreement.

         2. Employment Period, Terms and Conditions. The employment period,
terms and conditions of this Agreement shall be identical to those in the Bank
Employment Agreement unless explicitly superseded or expanded upon by this
Agreement.

         3. Compensation and Benefits. The compensation and benefits payable to
Mr. Durland under this Agreement and under the Bank Employment Agreement shall
not be duplicative but, rather, the Bank shall be primarily responsible for the
payments called for in the Bank's Employment Agreement and the Company hereby
guarantees performance of such obligations by the Bank.


         4. Excise Tax Indemnification.
           (a) This section 4 shall apply if Mr. Durland's employment is
terminated in circumstances giving rise to liability for excise taxes under
section 4999 of the Internal Revenue Code of 1986 (the "Code"). If this Section
4 applies, then, if for any taxable year, Mr. Durland shall be liable for the
payment of an

                                        2

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excise tax under section 4999 of the Code with respect to any payment in the
nature of compensation made by the Company or the Bank to (or for the benefit
of) Mr. Durland, the Company shall pay to Mr. Durland an amount equal to X
determined under the following formula:

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

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

         P  = the amount with respect to which such excise tax is assessed,
              determined without regard to this section 4;

        FI  = the highest marginal rate of income tax applicable to
              Mr. Durland under the Code for the taxable year in question;

       SLI  = the sum of the highest marginal rates of income tax applicable to
              Mr. Durland under all applicable state and local laws for the
              taxable year in question; and

         M  = the highest marginal rate of Medicare tax applicable to Mr.
              Durland under the Code for the taxable year in question.

With respect to any payment in the nature of compensation that is made to (or
for the benefit of) Mr. Durland under the terms of this Agreement, or otherwise,
and on which an excise tax under section 4999 of the Code will be assessed, the
payment determined under this section 4(a) shall be made to Mr. Durland on the
earlier of (i) the date the Company or the Bank is required to

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withhold such tax, or (ii) the date the tax is required to be
paid by Mr. Durland.

           (b) Notwithstanding anything in this section 4 to the contrary, in
the event that Mr. Durland's liability for the excise tax under section 4999 of
the Code for a taxable year is subsequently determined to be different than the
amount determined by the formula (X + P) x E, where X, P and E have the meanings
provided in section 4(a), Mr. Durland or the Company, as the case may be, shall
pay to the other party at the time that the amount of such excise tax is finally
determined, an appropriate amount, plus interest, such that the payment made
under section 4(a), when increased by the amount of the payment made to Mr.
Durland under this section 4(b) by the Company, or when reduced by the amount of
the payment made to the Company under this section 4(b) by Mr. Durland, equals
the amount that should have properly been paid to Mr. Durland under section
4(a). The interest paid under this section 4(b) shall be determined at the rate
provided under section 1274(b)(2)(B) of the Code. To confirm that the proper
amount, if any, was paid to Mr. Durland under this section 4, Mr. Durland shall
furnish to the Company a copy of each tax return which reflects a liability for
an excise tax payment made by the Company, at least 20 days before the date on
which such return is required to be filed with the Internal Revenue Service.

           (c) The provisions of this section 4 are designed to reflect the
provisions of applicable federal, state and local tax

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laws in effect on the date of this Agreement. If, after the date hereof, there
shall be any change in any such laws, this section 4 shall be modified in such
manner as Mr. Durland and the Company may mutually agree upon if and to the
extent necessary to assure that Mr. Durland is fully indemnified against the
economic effects of the tax imposed under section 4999 of the Code or any
similar federal, state or local tax.

         IN WITNESS WHEREOF, the Company 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
------------------------------


                                             GSB FINANCIAL CORPORATION


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

ATTEST:



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