Document:

<PAGE>

                                                                    EXHIBIT 10.1

[Geerlings & Wade Letterhead]

                               September 12, 2001

Mr. Richard E. Libby
51 Willowdale Road
Topsfield, MA  01983

Dear Rick:

      Geerlings & Wade, Inc. (the "Company") is pleased to offer you employment
in the position of Chief Marketing Officer. This letter and your response
constitute the Agreement between you and the Company concerning the terms and
conditions of that employment.

      1. Employment and Position. Employment will commence on September 17,
2001, or such earlier date to which you and the Company agree. You will be
employed on a full-time basis as Chief Marketing Officer, reporting to the Chief
Executive Officer of the Company. Your duties will include those intrinsic to
your position and such other duties, reasonably consistent with your position,
as may be assigned to you from time to time.

You will be expected to devote your full business time and your best
professional efforts to the performance of your duties and responsibilities for
the Company and to abide by all Company policies and procedures, as in effect
from time to time.

      2. Compensation and Benefits.

Signing Bonus. The Company shall pay you a one-time signing bonus of $10,000
within one week of your commencement of employment with the Company.

Base Salary. During employment, the Company will pay you a base salary at the
rate of $180,000 per year, payable in accordance with the regular payroll
practices of the Company and subject to increase from time to time by the
Company in its discretion.

Bonuses. You will be eligible to earn a bonus of up to $12,500 per quarter (to a
maximum of $50,000 per year) during employment. The amount of any bonus awarded
you shall be based on quarterly objectives determined by the Company after
consultation with you. Objectives may include, among others, sales, operating
profit, budget, customer house file growth and development of new marketing
program targets.

                                      -1-

<PAGE>

Stock Option. The Company will grant you an option to purchase 50,000 shares of
its common stock (the "Option"), subject to the approval of the Company's Board
of Directors Compensation Committee. The Option will vest during your employment
in three equal increments, on the first three anniversaries of the date of
grant, and will have an exercise price equal to the fair market value of the
Company's common stock on the date the Option is granted. The Option will be
subject to the terms and conditions of the Company's stock option plan as in
effect from time to time (the "Plan") and the terms and conditions of the stock
option certificate and any stock restriction agreement and other provisions
generally applicable to options granted to Company employees. Option vesting
shall accelerate on a change of control, as defined in the Plan.

Employee Benefit Plans. You will be entitled to participate in all employee
benefit plans from time to time in effect generally for Company employees,
subject to plan terms and applicable Company policies.

Vacation. You will be entitled to three weeks of paid vacation per year, subject
to Company policies as in effect from time-to-time.

Business Expenses. The Company will pay or reimburse you for all reasonable
business expenses incurred or paid by you in the performance of your duties and
responsibilities for the Company, subject to Company reimbursement policies as
in effect from time to time.

Withholding. All payments made by the Company under this Agreement shall be
reduced by any tax or other amounts required to be withheld by the Company under
applicable law.

      3. Termination of Employment. Employment shall continue until terminated
by you or the Company as follows:

Termination by You. You may terminate your employment upon sixty days' written
notice.

Termination by the Company. The Company may terminate your employment other than
for Cause or disability upon notice to you, in which event, it will provide you
three months' salary continuation if the termination occurs after you have been
continuously employed by the Company for three months or six months' salary
continuation if the termination occurs after you have been continuously employed
by the Company for twelve months. In the event you become disabled from working
for more than 90 days in any twelve month period, the Company may elect to
terminate your employment by written notice.

The Company may terminate your employment for Cause upon notice to you. "Cause"
means your failure to perform, or serious negligence in performance, of your
duties to the Company or its Affiliates; breach of your obligations under
Section 4 of this Agreement; or serious misconduct that could be harmful to the
business or reputation of the Company or any of its Affiliates.

                                      -2-

<PAGE>

For purposes of this Agreement, "Affiliates" means all persons and entities
directly or indirectly controlling, controlled by or under common control with
the Company, where control may be by either management authority or equity
interest.

Effect of Termination. In the event of termination of your employment, you will
be entitled to salary earned but not paid through the date of termination, bonus
compensation, if any, awarded but not yet paid, vacation time earned but not
used through the date of termination and business expenses reimbursable under
Company policies and not yet reimbursed. Except for severance pay provided in
the event of termination by the Company other than for Cause or disability, no
compensation is earned after termination of employment. Provisions of this
Agreement shall survive termination if so provided in this Agreement (including
without limitation your obligations under Section 4, below) or if necessary or
desirable for the enforcement of other surviving provisions.

      4. Confidential Information and Restricted Activities.

Confidentiality and Assignment of Rights. You agree that you will not use or
disclose to any other person or entity (except as required for the proper
performance of your regular duties for the Company) any Confidential
Information, as defined below. You understand that this restriction shall
continue to apply after your employment terminates, regardless of the reason for
such termination.

You also agree to assign to the Company any Intellectual Property, as defined
below, which you create or develop during employment (alone or with others, on
or off Company premises) which relates to the business of the Company or any of
its Affiliates or which utilizes the Confidential Information, facilities or
equipment of the Company or its Affiliates. You understand that this restriction
shall continue to apply after your employment terminates, regardless of the
reason for such termination.

"Confidential Information" means any and all information of the Company and its
Affiliates that is not generally available to the public. Confidential
Information also includes any information received by the Company or any of its
Affiliates from any person or entity with any understanding, express or implied,
that it will not be disclosed. Confidential Information does not include
information that enters the public domain, other than through your breach of
your obligations under this Agreement.

"Intellectual Property" means all inventions, discoveries, compositions,
concepts, ideas and the like (whether or not patentable or copyrightable or
constituting trade secrets) conceived, made, created, developed or reduced to
practice by you (alone or with others, on or off Company premises) during the
term of this Agreement that relate in any way to the business, products or
services of the Company or any of its Affiliates or to any prospective activity
of the Company or any of its Affiliates.

Conflicts of Interest and Non-Competition. You agree that some restrictions on
your activities during and after your employment are necessary to protect the
goodwill, Confidential

                                      -3-

<PAGE>

Information and other legitimate interests of the Company and its Affiliates.
While you are employed by the Company and for twelve (12) months after your
employment terminates, you shall not, directly or indirectly, whether as owner,
partner, investor, consultant, agent, employee, co-venturer or otherwise,
compete with the Company or any of its Affiliates or undertake any planning for
any business competitive with the Company or any of its Affiliates.
Specifically, but without limiting the foregoing, you agree not to engage in any
manner in any activity that is directly or indirectly competitive or potentially
competitive with the business of the Company or any of its Affiliates as
conducted or under consideration at any time during your employment, including
without limitation any activity that involves the retail sale of wine or wine
accessories via the mails or the Internet.

Enforcement of Covenants. You acknowledge that you have carefully read and
considered all the terms and conditions of this Agreement, including the
restraints imposed upon you pursuant to this Section 4. You agree that those
restraints are necessary for the reasonable and proper protection of the Company
and its Affiliates and that each and every one of the restraints is reasonable
in respect to subject matter, length of time and geographic area. You further
acknowledge that, were you to breach any of the covenants contained in this
Section, the damage to the Company would be irreparable. You therefore agree
that the Company, in addition to any other remedies available to it, shall be
entitled to preliminary and permanent injunctive relief against any breach or
threatened breach by you of any of those covenants, without having to post bond.
It is further agreed that, in the event that any provision of this Section 4
shall be determined by any court of competent jurisdiction to be unenforceable
by reason of its being extended over too great a time, too large a geographic
area or too great a range of activities, such provision shall be deemed to be
modified to permit its enforcement to the maximum extent permitted by law.

      5. Conflicting Agreements. In signing this Agreement, you give the Company
assurance that your signing this Agreement and the performance of your
obligations under it will not breach or be in conflict with any other agreement
to which you are a party or are bound and that you are not now subject to any
covenants against competition or similar covenants or court order that would
affect the performance of your obligations under this agreement. You agree that
you will not disclose to or use on behalf of the Company or any of its
Affiliates any proprietary information of a third party without that party's
consent.

      6. Miscellaneous.

This offer of employment with the Company is contingent on the following: (1)
the Company's receipt from two previous employers of references that are
satisfactory to the Company and (2) the Company's verification of your identity
and eligibility to work in the U.S., which shall require your completion of the
enclosed Form I-9 and your provision to the Company of the appropriate documents
listed on that Form.

This letter contains the entire agreement between you and the Company and
replaces all prior communications, agreements and understandings, written or
oral, with respect to the terms and conditions of your employment and all
matters related thereto. This Agreement may not be

                                      -4-

<PAGE>

modified or amended, and no breach shall be deemed to be waived, unless agreed
to in writing by you and the Company.

      If the foregoing is acceptable to you, please sign the enclosed copy of
this letter in the space provided and return it to me, at which time this letter
and that copy will take effect as a binding agreement between you and the
Company on the basis set forth above.

                                            Sincerely yours,
                                            GEERLINGS & WADE

                                            By:      /s/ David R. Pearce
                                                     ------------------------
                                                     David Pearce
                                                     President

Accepted and Agreed:

/s/ Richard E. Libby
---------------------

Date:    9-17-2001
      ---------------

                                      -5-EMPLOYMENT AGREEMENT

            THIS EMPLOYMENT AGREEMENT (the "Agreement") is made and entered into as of this
28th day of September 2001, by and between LSB Financial Corp. (the "Company") and Randolph
F. Williams (the "Employee").

            WHEREAS, commencing on the September 17, 2001 (the "Commencement Date"), the
Employee will serve as the President of the Company and of the Company's wholly-owned subsidiary,
Lafayette Savings Bank, FSB (the "Bank");

            WHEREAS, commencing on January 1, 2002, the Employee will also serve as the Chief
Executive Officer of the Company and the Bank;

            WHEREAS, the board of directors of the Company (the "Board of Directors" or the "Board")
believes it is in the best interests of the Company and its subsidiaries for the Company to enter into
this Agreement with the Employee in order to assure continuity of management of the Company and
its subsidiaries; and

            WHEREAS, the Board of Directors has approved and authorized the execution of this
Agreement with the Employee to take effect on the Commencement Date;

            NOW, THEREFORE, in consideration of the foregoing and of the respective covenants and
agreements of the parties herein, it is AGREED as follows:

            1.  Definitions.

                        (a)  The term "Change in Control" means (1) an acquisition of securities of the
Company or the Bank that is determined by the Board of Directors to constitute an acquisition of
control of the Company or the Bank within the meaning of the Change in Bank Control Act (12
U.S.C. § 1817(j)) and the Savings and Loan Holding Company Act (12 U.S.C. §1467a ff), and any
successor sections and the applicable regulations thereunder; (2) an event that would be required to
be reported in response to Item 1 of the current report on Form 8-K, as in effect on the
Commencement Date, pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 (the
"Exchange Act"); (3) any person (as the term is used in Sections 13(d) and 14(d) of the Exchange
Act) is or becomes the beneficial owner (as defined in Rule 13d-3 under the Exchange Act) directly
or indirectly of securities of the Company or the Bank representing 25% or more of the combined
voting power of the Company's or the Bank's outstanding securities; (4) individuals who are
members of the Board of Directors on the Commencement Date (the "Incumbent Board") cease for
any reason to constitute at least a majority thereof, provided that any person becoming a director
subsequent to the Commencement Date whose election was approved by a vote of at least three-quarters of the directors comprising the Incumbent Board, or whose nomination for election by the
Company's stockholders was approved by a nominating committee serving under an Incumbent
Board, shall be considered a member of the Incumbent Board; or (5) approval by the Company's
stockholders of a plan of reorganization, merger or consolidation of the Company, sale of all or
substantially all of the assets of the Company, a similar transaction in which the Company is not the
resulting entity; provided that the term "change in control" shall not include an acquisition of
securities by an employee benefit plan of the Bank or the Company.  In the application of regulations

NEXT PAGE

under the Change in Bank Control Act or the Savings and Loan Holding Company Act,
determinations to be made by the applicable federal banking regulator shall be made by the Board of
Directors.

                        (b)  The term "Consolidated Subsidiaries" means any subsidiary or subsidiaries of the
Company (or its successors) that are part of the consolidated group of the Company (or its
successors) for federal income tax reporting.

                        (c)  The term "Date of Termination" means the date upon which the Employee's
employment with the Company or the Bank or both ceases, as specified in a notice of termination
pursuant to Section 8 of this Agreement.

                        (d)  The term "Involuntary Termination" means the termination of the employment
of the Employee (i) by either the Company or the Bank or both without his express written consent;
or (ii) by the Employee by reason of a material diminution of or interference with his duties,
responsibilities or benefits, including (without limitation) any of the following actions unless
consented to in writing by the Employee: (1) a requirement that the Employee be based at any place
other than Lafayette, Indiana, or within 35 miles thereof, except for reasonable travel on Company
or Bank business; (2) a material demotion of the Employee; (3) a material reduction in the number
or seniority of personnel reporting to the Employee or a material reduction in the frequency with
which, or in the nature of the matters with respect to which such personnel are to report to the
Employee, other than as part of a Bank- or Company-wide reduction in staff; (4) a reduction in the
Employee's salary or a material adverse change in the Employee's perquisites, benefits, contingent
benefits or vacation, other than prior to a Change in Control as part of an overall program applied
uniformly and with equitable effect to all members of the senior management of the Bank or the
Company; (5) a material permanent increase in the required hours of work or the workload of the
Employee; or (6) the failure of the Board of Directors (or a board of directors of a successor of the
Company) to elect him as President and Chief Executive Officer of the Company (or a successor of
the Company) or any action by the Board of Directors (or a board of directors of a successor of the
Company) removing him from any of such offices, or the failure of the board of directors of the Bank
(or any successor of the Bank) to elect him as President and Chief Executive Officer of the Bank (or
any successor of the Bank) or any action by such board (or board of a successor of the Bank)
removing him from any of such offices.  The term "Involuntary Termination" does not include
Termination for Cause or termination of employment due to retirement, death, disability or
suspension or temporary or permanent prohibition from participation in the conduct of the Bank's
affairs under Section 8 of the Federal Deposit Insurance Act ("FDIA").

                        (e)  The terms "Termination for Cause" and "Terminated for Cause" mean termination
of the employment of the Employee with either the Company or the Bank, as the case may be,
because of the Employee's dishonesty, incompetence, willful misconduct, breach of a fiduciary duty
involving personal profit, intentional failure to perform stated duties, willful violation of any law, rule,
or regulation (excluding traffic violations or similar offenses) or final cease-and-desist order, or
material breach of any provision of this Agreement.  No act or failure to act by the Employee shall
be considered willful unless the Employee acted or failed to act with an absence of good faith and
without a reasonable belief that his action or failure to act was in the best interest of the Company.
The Employee shall not be deemed to have been Terminated for Cause unless and until there shall

2NEXT PAGE

have been delivered to the Employee a copy of a resolution, duly adopted by the affirmative vote of
not less than a majority of the entire membership of the Board of Directors at a meeting of the Board
duly called and held for such purpose (after reasonable notice to the Employee and an opportunity
for the Employee, together with the Employee's counsel, to be heard before the Board), stating that
in the good faith opinion of the Board of Directors the Employee has engaged in conduct described
in the preceding sentence and specifying the particulars thereof in detail.  The opportunity of the
Employee to be heard before the Board shall not affect the right of the Employee to arbitration as set
forth in paragraph 19.

            2.  Term.  The initial term of this Agreement shall be for the period commencing on the
Commencement Date and terminating on December 31, 2002, subject to earlier termination as
provided herein.  Beginning on December 31, 2002, and on each anniversary thereafter, the term of
this Agreement shall be extended for a period of one year, provided that the Company has not given
notice to the Employee in writing at least 90 days prior to such anniversary that the term of this
Agreement shall not be extended further, and provided further that the Employee has not received
an unsatisfactory performance review by either the Board of Directors or the board of directors of
the Bank.

            3.  Employment.  The Employee is employed as the President of the Company and the Bank
effective as of the Commencement Date and as the Chief Executive Officer of the Company and the
Bank effective as January 1, 2002.  As such, the Employee shall render administrative and
management services as are customarily performed by persons situated in similar executive capacities,
and shall have such other powers and duties as the Board of Directors 7 or the board of directors of
the Bank may prescribe from time to time.  The Employee shall also render services to any subsidiary
or subsidiaries of the Company or the Bank as requested by the Company or the Bank from time to
time consistent with his executive position.  The Employee shall devote his best efforts and full time
and attention to the business and affairs of the Company and the Bank to the extent necessary to
discharge his responsibilities hereunder.  The Employee may (i) serve on corporate or charitable
boards or committees, and (ii) manage personal investments, so long as such activities do not interfere
materially with performance of his responsibilities hereunder. 

            4.  Compensation.

                        (a)  Salary.  The Company agrees to pay the Employee during the term of this
Agreement an annualized base salary of at least $160,000 per year (the "Company Salary"); provided
that any amounts of salary actually paid to the Employee by any Consolidated Subsidiaries shall
reduce the amount to be paid by the Company to the Employee.  The Company Salary shall be paid
no less frequently than monthly and shall be subject to customary tax withholding.  The amount of
the Employee's Company Salary shall be increased (but shall not be decreased) from time to time in
accordance with the amounts of salary approved by the Board of Directors or the board of directors
of any of the Consolidated Subsidiaries after the Commencement Date. Adjustments in salary or other
compensation shall not limit or reduce any other obligation of the Company under this Agreement.

                        (b)  Discretionary Bonuses.  The Employee shall be entitled to participate in an
equitable manner with all other executive officers of the Company and the Bank in such performance-based and discretionary bonuses, if any, as are authorized and declared by the Board of Directors for

3NEXT PAGE

executive officers of the Company and by the board of directors of the Bank for executive officers
of the Bank.

                        (c)  Grant of Stock Options and Restricted Stock.  On the Commencement Date, the
compensation committee of the Company shall grant to the Employee, pursuant to and in accordance
with the terms of the Company's stock option and incentive plan and recognition and retention plan,
the following: (i) an incentive stock option to purchase 10,000 shares of Company common stock and
(ii) 10,000 restricted shares of Company common stock.  Each of these awards shall vest in five equal
annual installments, subject to the Employee's continuous employment with the Company, with the
first installment vesting on the first anniversary of the Commencement Date, and shall otherwise be
granted on the terms and conditions consistent with the Company's practice in making grants to
similarly situated executives.

                        (d)  Expenses.  The Employee shall be entitled to receive prompt reimbursement for
all reasonable expenses incurred by the Employee in performing services under this Agreement in
accordance with the policies and procedures applicable to the executive officers of the Company and
the Bank, provided that the Employee accounts for such expenses as required under such policies and
procedures.

                        (e)  Deferral of Non-Deductible Compensation. In the event that the Employee's
aggregate compensation (including compensatory benefits which are deemed remuneration for
purposes of Section 162(m) of the Internal Revenue Code of 1986 as amended (the "Code")) from
the Company and the Consolidated Subsidiaries for any calendar year exceeds the greater of (i)
$1,000,000 or (ii) the maximum amount of compensation deductible by the Company or any of the
Consolidated Subsidiaries in any calendar year under Section 162(m) of the Code (the "maximum
allowable amount"), then any such amount in excess of the maximum allowable amount shall be
mandatorily deferred with interest thereon at 8% per annum, compounded annually, to a calendar year
such that the amount to be paid to the Employee in such calendar year, including deferred amounts
and interest thereon, does not exceed the maximum allowable amount.  Subject to the foregoing,
deferred amounts including interest thereon shall be payable at the earliest time permissible.  All
unpaid deferred amounts shall be paid to the Employee not later than his Date of Termination unless
his Date of Termination is on a December 31st, in which case, the unpaid deferred amounts shall be
paid to the Employee on the first business day of the next succeeding calendar year.  The provisions
of this subsection shall survive any termination of the Employee's employment and any termination
of this Agreement.

            5.  Benefits.

                        (a)  Participation in Benefit Plans.  The Employee shall be entitled to participate, to
the same extent as executive officers of the Company and the Bank generally, in all plans of the
Company and the Bank relating to pension, retirement, thrift, profit-sharing, savings, group or other
life insurance, hospitalization, medical and dental coverage, travel and accident insurance, education,
cash bonuses, and other retirement or employee benefits or combinations thereof.  In addition, the
Employee shall be entitled to be considered for benefits under all of the stock and stock option related
plans in which the Company's or the Bank's executive officers are eligible or become eligible to
participate. 

4NEXT PAGE

                        (b)  Fringe Benefits.  The Employee shall be eligible to participate in, and receive
benefits under, any other fringe benefit plans or perquisites which are or may become generally
available to the Company's or the Bank's executive officers, including but not limited to supplemental
retirement, incentive compensation, supplemental medical or life insurance plans, company cars, club
dues, physical examinations, financial planning and tax preparation services.

                        (c)  Interest Payments on Third Party Loan.  The Company shall reimburse to
Employee the amount of any interest charges for a two year period on any loan to Employee from
a non-affiliated lender in an aggregate of up to $30,000 in principal amount.  After this two year
period, all interest payments shall be the sole responsibility of Employee.  The Company shall not be
an obligor or guarantor on any such loan and shall not be responsible for any principal payments, late
charges, loan fees or similar charges or costs on such loan.

                        (d)  Automobile.  The Company shall either purchase or lease an automobile of the
Company's choosing for the sole use of the Employee, at no cost to the Employee.

                        (e)  Country Club Dues.  The Company shall pay for the Employee any initiation
fees, monthly dues and assessments, and any other business related charges at a local country club.

                        (f)  Salary and Benefits Provided by the Bank.  To the extent that the Bank pays
salary and pays or provides other compensation and benefits of any kind provided for in this
Agreement, the Company's obligation do so under this Agreement shall be excused.

            6.  Vacations; Leave.  The Employee shall be entitled to annual paid vacation, in accordance
with the policies established by the Board of Directors and the board of directors of the Bank for
executive officers, in no event less than 23 days per year, and to voluntary leaves of absence, with or
without pay, from time to time at such times and upon such conditions as the Board of Directors may
determine in its discretion.

            7.  Termination of Employment.  The Board of Directors may terminate the Employee's
employment at any time and such termination of employment, except in the case of Termination for
Cause, shall not prejudice the Employee's right to compensation or other benefits under this
Agreement.

                        (a)  Termination for Cause.  In the event of Termination for Cause, the Company shall
pay the Employee the Employee's salary through the Date of Termination, and the Company shall
have no further obligation to the Employee under this Agreement.

                        (b)  Voluntary Termination.  The Employee's employment may be voluntarily
terminated by the Employee at any time upon 90 days' written notice to the Company or such shorter
period as may be agreed upon between the Employee and the Board of Directors, for reasons other
than reasons that constitute Involuntary Termination.  In the event of such voluntary termination, the
Bank shall be obligated to continue to pay to the Employee the Employee's salary and benefits only
through the Date of Termination, at the time such payments are due, and the Company shall have no
further obligation to the Employee under this Agreement.

5NEXT PAGE

                        (c)  Involuntary Termination Not Related to a Change in Control.  In the event the
Employee experiences an Involuntary Termination not related to a Change in Control, (1) the
Company shall pay to the Employee during the remaining term of this Agreement the Employee's
salary at the rate in effect immediately prior to the Date of Termination, payable in such manner and
at such times as such salary would have been payable to the Employee under Section 4(a) if the
Employee had continued to be employed by the Company, and (2) the Company shall provide to the
Employee during the remaining term of this Agreement health insurance benefits as maintained for
the benefit of its Senior Executives from time to time during the remaining term of the Agreement
on substantially the same terms as would apply if he had continued to be employed.

                        (d)  Involuntary Termination Related to a Change in Control; Tax Gross Up.  In the
event the Employee experiences an Involuntary Termination at the time of, or within 12 months
following a Change In Control, the Company shall (1) pay to the Employee in a lump sum in cash
within 25 business days after the Date of Termination an amount equal to 299% of the Employee's
"base amount" as defined in Section 280G of the Internal Revenue Code of 1986, as amended (the
"Code"); and (2) provide to the Employee during the remaining term of this Agreement, at no cost
to Employee, health benefits as are maintained for Senior Executives from time to time during the
remaining term of this Agreement on substantially the same terms as would apply if he had continued
to be employed.

                        In the event that any payments or benefits provided or to be provided to the
Employee pursuant to this Agreement, in combination with payments or benefits, if any, from other
plans or arrangements maintained by the Company or any of the Consolidated Subsidiaries, constitute
"excess parachute payments" under Section 280G of the Code that are subject to excise tax under
Section 4999 of the Code, the Company shall pay to the Employee in cash an additional amount equal
to the amount of the Gross Up Payment (as hereinafter defined).  The "Gross Up Payment" shall be
the amount needed to ensure that the amount of such payments and the value of such benefits
received by the Employee (net of such excise tax and any federal, state and local tax on the
Company's payment to him attributable to such excise tax) equals the amount of such payments and
value of such benefits as he would receive in the absence of such excise tax and any federal, state and
local tax on the Company's payment to him attributable to such excise tax.  The Company shall pay
the Gross Up Payment within 30 days after the Date of Termination.  For purposes of determining
the amount of the Gross Up Payment, the value of any non-cash benefits and deferred payments or
benefits shall be determined by the Company's independent auditors in accordance with the principles
of Section 280G(d)(3) and (4) of the Code.  In the event that, after the Gross Up Payment is made,
the amount of the excise tax is determined to be less than the amount calculated in the determination
of the actual Gross Up Payment made by the Company, the Employee shall repay to the Company,
at the time that such reduction in the amount of excise tax is finally determined, the portion of the
Gross Up Payment attributable to such reduction, plus interest on the amount of such repayment at
the applicable federal rate under Section 1274 of the Code from the date of the Gross Up Payment
to the date of the repayment.  The amount of the reduction of the Gross Up Payment shall reflect any
subsequent reduction in excise taxes resulting from such repayment.  In the event that, after the Gross
Up Payment is made, the amount of the excise tax is determined to exceed the amount anticipated
at the time the Gross Up Payment was made, the Company shall pay to the Employee, in immediately
available funds, at the time that such additional amount of excise tax is finally determined, an
additional payment ("Additional Gross Up Payment") equal to such additional amount of excise tax

6NEXT PAGE

and any federal, state and local taxes thereon, plus all interest and penalties, if any, owed by the
Employee with respect to such additional amount of excise and other tax.  The Company shall have
the right to challenge, on the Employee's behalf, any excise tax assessment against him as to which
the Employee is entitled to (or would be entitled if such assessment is finally determined to be proper)
a Gross Up Payment or Additional Gross Up Payment, provided that all costs and expenses incurred
in such a challenge shall be borne by the Company and the Company shall indemnify the Employee
and hold him harmless, on an after-tax basis, from any excise or other tax (including interest and
penalties with respect thereto) imposed as a result of such payment of costs and expenses by the
Company.

                        (e)  Death; Disability.  In the event of the death of the Employee while employed under
this Agreement and prior to any termination of employment, the Employee's estate, or such person
as the Employee may have previously designated in writing, shall be entitled to receive from the
Company the salary of the Employee through the last day of the calendar month in which the
Employee died.  If the Employee becomes "permanently disabled" while employed under this
Agreement, the Board of Directors shall be entitled to terminate this Agreement and the employment
of the Employee at any time at its discretion.  For purposes of this Agreement, the term "permanently
disabled" means that the Employee has a mental or physical infirmity which permanently impairs his
ability to perform substantially his duties and responsibilities under this Agreement and which results
in (i) eligibility of the Employee under the long-term disability plan of the Company or the Bank, if
any; or (ii) inability of the Employee to perform substantially his duties and responsibilities under this
Agreement for a period of 180 consecutive days.

                        (f)  Temporary Suspension or Prohibition.  If the Employee is suspended and/or
temporarily prohibited from participating in the conduct of the Bank's affairs by a notice served under
Section 8(e)(3) or (g)(1) of the FDIA, 12 U.S.C. § 1818(e)(3) and (g)(1), the Company's obligations
under this Agreement shall be suspended as of the date of service, unless stayed by appropriate
proceedings.  If the charges in the notice are dismissed, the Company may in its discretion (i) pay the
Employee all or part of the compensation withheld while its obligations under this Agreement were
suspended and (ii) reinstate in whole or in part any of its obligations which were suspended.

                        (g)  Permanent Suspension or Prohibition.  If the Employee 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 (g)(1) of the FDIA, 12 U.S.C. § 1818(e)(4) and (g)(1), all obligations of the
Company under this Agreement shall terminate as of the effective date of the order, but vested rights
of the contracting parties shall not be affected.

                        (h)  Default of the Bank.  If the Bank is in default (as defined in Section 3(x)(1) of the
FDIA), all obligations of the Company under this Agreement shall terminate as of the date of default,
but this provision shall not affect any vested rights of the contracting parties.

7NEXT PAGE

                        (i)  Termination by Regulators.  All obligations of the Company under this Agreement
shall be terminated, except to the extent determined that continuation of this Agreement is necessary
for the continued operation of the Bank:  (i) by the Director of the Office of Thrift Supervision (the
"Director") or his or her designee, at the time the Federal Deposit Insurance Corporation enters into
an agreement to provide assistance to or on behalf of the Bank under the authority contained in
Section 13(c) of the FDIA; or (ii) by the Director or his or her designee, at the time the Director or
his or her designee approves a supervisory merger to resolve problems related to operation of the
Bank or when the Bank is determined by the Director to be in an unsafe or unsound condition.  Any
rights of the parties that have already vested, however, shall not be affected by any such action.

            8.  Notice of Termination.  In the event that the Company or the Bank, or both, desire to
terminate the employment of the Employee during the term of this Agreement, the Company or the
Bank, or both, shall deliver to the Employee a written notice of termination, stating whether such
termination constitutes Termination for Cause or Involuntary Termination, setting forth in reasonable
detail the facts and circumstances that are the basis for the termination, and specifying the date upon
which employment shall terminate, which date shall be at least 30 days after the date upon which the
notice is delivered, except in the case of Termination for Cause.  In the event that the Employee
determines in good faith that he has experienced an Involuntary Termination of his employment, he
shall send a written notice to the Company stating the circumstances that constitute such involuntary
termination and the date upon which his employment shall have ceased due to such Involuntary
Termination.  In the event that the Employee desires to effect a voluntary termination as described
in Section 7(b) above, he shall deliver a written notice to the Company, stating the date upon which
employment shall terminate, which date shall be at least 30 days after the date upon which the notice
is delivered, unless the parties agree to a date sooner.  

            9.  No Mitigation.  The Employee shall not be required to mitigate the amount of any salary
or other payment or benefit provided for in this Agreement by seeking other employment or
otherwise, nor shall the amount of any payment or benefit provided for in this Agreement be reduced
by any compensation earned by the Employee as the result of employment by another employer, by
retirement benefits after the Date of Termination or otherwise.

            10.  Attorneys Fees.  The Company shall pay all legal fees and related expenses (including the
costs of experts, evidence and counsel) incurred by the Employee as a result of (i) the Employee's
contesting or disputing any termination of employment, or (ii) the Employee's seeking to obtain or
enforce any right or benefit provided by this Agreement or by any other plan or arrangement
maintained by the Company (or its successors) or the Consolidated Subsidiaries under which the
Employee is or may be entitled to receive benefits; provided that the Company's obligation to pay
such fees and expenses is subject to the Employee's prevailing with respect to the matters in dispute
in any action initiated by the Employee or the Employee's having been determined to have acted
reasonably and in good faith with respect to any action initiated by the Company or the Bank.

            11.  Directorship.  The Company has agreed to adopt a resolution to increase the size of the
Board of Directors from 10 members to 11 members and to appoint the Employee to the Board of
Directors of the Company, effective as of the Commencement Date, for a term expiring at the annual
meeting of stockholders in 2003. The Board of Directors shall also take such actions necessary to
cause the Employee to be appointed to the board of directors of the Bank, as soon as practicable after

8NEXT PAGE

the Commencement Date, for a term coinciding with the Employee's term on the Board of Directors
of the Company.

            12.  Non-Disclosure and Non-Solicitation.  

                        (a)  Non-Disclosure.  The Employee acknowledges that he has acquired, and will
continue to acquire while employed by the Company and/or any Consolidated Subsidiary, special
knowledge of the business, affairs, strategies and plans of the Company and the Consolidated
Subsidiaries which has not been disclosed to the public and which constitutes confidential and
proprietary business information owned by the Company and the Consolidated Subsidiaries, including
but not limited to, information about the customers, customer lists, software, data, formulae,
processes, inventions, trade secrets, marketing information and plans, and business strategies of the
Company and the Consolidated Subsidiaries, and other information about the products and services
offered or developed or planned to be offered or developed by the Company and/or the Consolidated
Subsidiaries ("Confidential Information").  The Employee agrees that, without the prior written
consent of the Company, he shall not, during the term of his employment or at any time thereafter,
in any manner directly or indirectly disclose any Confidential Information to any person or entity other
than the Company and the Consolidated Subsidiaries.  Notwithstanding the foregoing, if the
Employee is requested or required (including but not limited to by oral questions, interrogatories,
requests for information or documents in legal proceeding, subpoena, civil investigative demand or
other similar process) to disclose any Confidential Information the Employee shall provide the
Company with prompt written notice of any such request or requirement so that the Company and/or
a Consolidated Subsidiary may seek a protective order or other appropriate remedy and/or waive
compliance with the provisions of this Section 12(a). If, in the absence of a protective order or other
remedy or the receipt of a waiver from the Company, the Employee is nonetheless legally compelled
to disclose Confidential Information to any tribunal or else stand liable for contempt or suffer other
censure or penalty, the Employee may, without liability hereunder, disclose to such tribunal only that
portion of the Confidential Information which is legally required to be disclosed, provided that the
Employee exercise his best efforts to preserve the confidentiality of the Confidential Information,
including without limitation by cooperating with the Company and/or a Consolidated Subsidiary to
obtain an appropriate protective order or other reliable assurance that confidential treatment will be
accorded the Confidential Information by such tribunal.  On the Date of Termination, the Employee
shall promptly deliver to the Company all copies of documents or other records (including without
limitation electronic records) containing any Confidential Information that is in his possession or
under his control, and shall retain no written or electronic record of any Confidential Information. 

                        (b)  Non-Solicitation.  During the three year period next following the Date of
Termination, the Employee shall not directly or indirectly solicit, encourage, or induce any person
while employed by the Company or any Consolidated Subsidiary to (i) leave the Company or any
Consolidated Subsidiary, (ii) cease his or her employment with the Company or any Consolidated
Subsidiary or (iii) accept employment with another entity or person. 

            The provisions of this Section 12 shall survive any termination of the Employee's employment
and any termination of this Agreement.

9NEXT PAGE

            13.  No Assignments.

                        (a)  This Agreement is personal to each of the parties hereto, and neither party may
assign or delegate any of its rights or obligations hereunder without first obtaining the written consent
of the other party; provided, however, that the Company shall require any successor or assign
(whether direct or indirect, by purchase, merger, consolidation or otherwise) by an assumption
agreement in form and substance satisfactory to the Employee, to expressly assume and agree to
perform this Agreement in the same manner and to the same extent that the Company would be
required to perform it if no such succession or assignment had taken place.  Failure of the Company
to obtain such an assumption agreement prior to the effectiveness of any such succession or
assignment shall be a breach of this Agreement and shall entitle the Employee to compensation and
benefits from the Company in the same amount and on the same terms as provided for an Involuntary
Termination under Section 7 hereof.  For purposes of implementing the provisions of this Section
13(a), the date on which any such succession becomes effective shall be deemed the Date of
Termination.

                        (b)  This Agreement and all rights of the Employee hereunder shall inure to the benefit
of and be enforceable by the Employee's personal and legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees.  

            14.  Notice.  For the purposes of this Agreement, notices and all other communications
provided for in this Agreement shall be in writing and shall be deemed to have been duly given when
personally delivered or sent by certified mail, return receipt requested, postage prepaid, to the
Company at its home office, to the attention of the Board of Directors with a copy to the Secretary
of the Company, or, if to the Employee, to such home or other address as the Employee has most
recently provided in writing to the Company.

            15.  Amendments.  No amendments or additions to this Agreement shall be binding unless in
writing and signed by both parties, except as herein otherwise provided.  

            16.  Headings.  The headings used in this Agreement are included solely for convenience and
shall not affect, or be used in connection with, the interpretation of this Agreement.

            17.  Severability. The provisions of this Agreement shall be deemed severable and the
invalidity or unenforceability of any provision shall not affect the validity or enforceability of the other
provisions hereof.

            18.  Governing Law. This Agreement shall be governed by the laws of the State of Indiana.

            19.  Arbitration.  Any dispute or controversy arising under or in connection with this
Agreement (other than relating to the enforcement of the provisions of Section 12) shall be settled
exclusively by arbitration in accordance with the rules of the American Arbitration Association then
in effect.  Judgment may be entered on the arbitrator's award in any court having jurisdiction.

10NEXT PAGE

            20.  Equitable and Other Judicial Relief.  In the event of an actual or threatened breach by
the Employee of any of the provisions of Section 12, the Company shall be entitled to equitable relief
in the form of an injunction from a court of competent jurisdiction and such other equitable and legal
relief as such court deems appropriate under the circumstances.  The parties agree that the Company
shall not be required to post any bond in connection with the grant or issuance of an injunction
(preliminary, temporary and/or permanent) by a court of competent jurisdiction, and if a bond is
nevertheless required, the parties agree that it shall be in a nominal amount.  The parties further agree
that in the event of a breach by the Employee of any of the provisions of Section 12, the Company
will suffer irreparable damage and its remedy at law against the Employee is inadequate to
compensate it for such damage.

            IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year
first above written.

            THIS AGREEMENT CONTAINS A BINDING ARBITRATION PROVISION WHICH
MAY BE ENFORCED BY THE PARTIES.	 

	Attest:

/s/ Mary Jo David                                       
Secretary		LSB FINANCIAL CORP.

/s/ Mariellen M. Neudeck                      
By:   Mariellen M. Neudeck
Its:    Chairman of the Board

			EMPLOYEE

/s/ Randolph F. Williams                       
Randolph F. Williams

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00031-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00031-of-00352.parquet"}]]