EXHIBIT 10.1

                              EMPLOYMENT AGREEMENT

         This EMPLOYMENT AGREEMENT (this "Agreement") is made as of the 29th day
of December, 2000, by and among THE TROY SAVINGS BANK, a New York-chartered
capital stock savings bank having its principal place of business in Troy, New
York (the "Bank"), TROY FINANCIAL CORPORATION, a Delaware corporation owning all
of the issued and outstanding shares of capital stock of the Bank ("Troy
Financial") (the Bank and Troy Financial, collectively, the "Employers"), and
David J. DeLuca, an individual residing in Latham, New York (the "Executive").

         WHEREAS, the Employers and the Executive desire that the Executive be
employed as Senior Vice President and Chief Financial Officer of the Employers;

         WHEREAS, the Boards of Directors of the Employers (collectively, the
"Boards"), have approved and authorized the Employers to enter into this
Agreement with the Executive, effective as of the date set out above;

         WHEREAS, the Employee has previously entered into an Employment
Agreement dated as of August 1, 1998, as amended, with Catskill Savings Bank
("Catskill"), which Employment Agreement the Bank assumed as a result of the
merger of Catskill with and into the Bank (the "Prior Agreement");

         WHEREAS, the parties desire to enter into this Agreement, setting forth
the terms and conditions for the employment relationship of the Executive with
the Employers and to replace and supercede the Prior Agreement:

         NOW, THEREFORE, it is AGREED as follows:

         1.       EMPLOYMENT. The Executive is employed as Senior Vice President
and Chief Financial Officer of the Employers during the Employment Term (as
defined in Section 5 below). As the Senior Vice President and Chief Financial
Officer of the Employers, the Executive shall render executive, policy and other
management services to the Employers of the type customarily performed by
persons serving in a similar officer capacity and shall report to the Chief
Executive Officer(s) of the Employers, except as such Chief Executive Officer
shall otherwise determine. The Executive shall also perform such duties as the
Chief Executive Officer(s) of the Employers or the Boards may from time to time
reasonably direct. During the Employment Term, there shall be no material
decrease in the duties and responsibilities of the Executive otherwise than as
provided herein, unless the parties otherwise agree in writing. During the
Employment Term, the Executive shall not be required to relocate his place of
employment to a location more than 50 miles away from the Bank's Troy, New York
location, or outside the State of New York, to perform his duties hereunder,
except for reasonably required travel by the Executive on the business of the
Employers.

         2.       COMPENSATION.

                  (a) The Executive's salary during the Employment Term
initially shall be $145,000 per annum, which amount shall be paid by the
Employers or either of them. The Executive's salary shall be reviewed by the
Boards prior to December 31, 2001, and thereafter on an annual basis prior to
December 31 of each year (or such date as from time to time is the date used by
the Employers for review of executive compensation) during the Employment Term.
In so reviewing the Executive's salary, the Boards shall consider increases in
the amount of the Executive's salary for increases in the cost of living for
Rensselaer County, New York, and based upon the Executive's performance and
scope of responsibility.

                  (b) The salary of the Executive shall not be decreased at any
time during the Employment Term from the amount then in effect, unless the
Executive otherwise agrees in writing. Participation in deferred compensation,
discretionary bonus, retirement and other employee benefit plans and in fringe
benefits, other than salary reduction programs in which the Executive elects to
participate, shall not reduce the salary payable to the Executive under this
Section 2. The salary under this Section 2 shall be payable to the Executive not
less frequently than monthly. The Executive shall not be entitled to receive
fees for serving as a director of the Employers or any of their subsidiaries or
for serving as a member of any committee of the Boards of Directors of the
Employers or any of their subsidiaries.



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<PAGE>

         3.       DISCRETIONARY BONUSES; BUSINESS EXPENSES.

                  (a) During the Employment Term, the Executive shall be
entitled to participate in an equitable manner with all other executive
employees of the Employers in such discretionary bonuses as may be authorized,
declared and paid by the Boards to executive employees. No other compensation
provided for in this Agreement shall be deemed a substitute for the Executive's
right to participate in such bonuses when and as declared by the Boards. This
provision shall not preclude the grant of any other bonus to the Executive as
determined by the Boards.

                  (b) The Executive is expected and is authorized to incur
reasonable expenses in the performance of his duties hereunder, including the
costs of business entertainment, travel, and attendance at conventions and
meetings. The Employers shall reimburse the Executive for all such expenses
promptly upon periodic presentation by the Executive of an itemized account of
such expenses.

         4.       PARTICIPATION IN RETIREMENT AND EMPLOYEE BENEFIT PLANS; FRINGE
BENEFITS. During the Employment Term, the Executive shall be entitled to
participate in any incentive, bonus, management recognition, equity
compensation, retirement, deferred compensation, fringe benefit or welfare
benefit plan of the Employers, including any plan providing for stock options,
restricted stock, employee stock purchases, pension or retirement income,
retirement savings, employee stock ownership, deferred compensation or medical,
prescription, dental, disability, employee life, group life, accidental death or
travel accident insurance that the Employers may adopt for the benefit of
executive employees, in accordance with the terms of such plans.

         5.       TERM. The initial term of employment under this Agreement
shall commence on December 29, 2000 and end on December 31, 2003 (the "Initial
Term"). Subject to annual review and approval by the Boards, this Agreement may
be extended by written notice from the Employers to the Employee for an
additional consecutive 12-month period (the "Extended Term") as of December 31,
2001 and each December 31 thereafter, unless the Executive has given contrary
written notice to the Employers at least three months before any such renewal
date. The Initial Term and all such Extended Terms are collectively referred to
herein as the "Employment Term."

         6.       STANDARDS. The Executive shall perform his duties and
responsibilities under this Agreement in accordance with such reasonable
standards as may be established from time to time by the Boards. The
reasonableness of such standards shall be measured against standards for
executive performance generally prevailing in the financial institutions
industry.

         7.       VOLUNTARY ABSENCES; VACATIONS. The Executive shall be
entitled, without loss of pay, to absent himself voluntarily for reasonable
periods of time from the performance of his duties and responsibilities under
this Agreement. All such voluntary absences shall count as paid vacation time,
unless the Boards otherwise approve. The Executive shall be entitled to an
annual paid vacation of five weeks per year or such longer period as the Boards
may approve. The timing of paid vacations shall be scheduled in a reasonable
manner by the Executive. The Executive shall not be entitled to receive any
additional compensation from the Employers on account of his failure to take a
paid vacation.

         8.       TERMINATION OF EMPLOYMENT.

                  (a)      (i)      The Employers may terminate the Executive's
employment at any time, but any termination by the Employers during the
Employment Term other than termination for Cause (as defined below) shall not
prejudice the Executive's right to compensation or other benefits under this
Agreement.

                           (ii)     The Executive shall have no right to receive
compensation or other benefits for any period after termination for Cause.
"Cause" shall mean the Executive's personal dishonesty, incompetence, willful
misconduct, breach of fiduciary duty involving personal profit, intentional
failure to perform material stated duties, willful violation of any law, rule,
regulation (other than traffic violations or similar offenses) or written
agreement with, or order or other supervisory direction from, any federal or
state regulatory authority. In determining incompetence, the acts or omissions
shall be measured against standards generally prevailing in the financial
institutions industry; provided, it shall be the burden of the Employers to
prove the alleged acts and omissions and the prevailing nature of the standards
the Employers shall have alleged are violated by such acts and/or omissions.

                           (iii)    The parties acknowledge and agree that
damages that will result to the Executive for termination without cause shall be
extremely difficult or impossible to establish or prove, and agree that, unless
the termination is for cause, the Employers shall be obligated, concurrently
with such termination, to make a lump sum cash payment to the Executive as
liquidated damages of an amount equal to three times the sum of (A) the
Executive's then current annual base salary under Section 2 of this Agreement
and (B) the amount of any bonuses that were payable to the Executive during the
12 months preceding the termination (including bonuses that were earned during
such period but the payment of which was deferred to a later period). The
Executive agrees that, except for such other payments and benefits to which the
Executive may be entitled as expressly provided by the terms of this



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Agreement, such liquidated damages shall be in lieu of all other claims which
Executive may make by reason of such termination. Such payment to the Executive
shall be made on or before the Executive's last day of employment with the
Employers. The liquidated damages amount shall not be reduced by any
compensation which the Executive may receive for other employment with another
employer after termination of his employment with the Employers.

                           (iv)     In addition to the liquidated damages above
described that are payable to the Executive for termination without cause, in
the event of any such termination:

                                    (1)      concurrently with such termination,
the Employers shall pay to the Executive an amount equal to the excess of (A)
the actuarial equivalent (utilizing actuarial assumptions no less favorable to
the Executive than those in effect under the Bank's qualified defined benefit
pension plan before such termination) of the employer-provided benefits under
the qualified pension, 401(k), profit sharing, stock bonus and employee stock
ownership plans of Troy Financial and the Bank (the "Qualified Plans"), the Troy
Savings Bank Supplemental Executive Retirement Plan (including benefits
determined by reference to the Qualified Plans) and any other excess or
supplemental retirement plan in which the Executive participates (together, the
"SERP") that the Executive would have received if the Executive's employment had
continued for a period of 36 months after such termination (assuming for this
purpose that all accrued benefits are fully vested, that the Executive's
compensation during such 36-month period is equal to the amount of the
liquidated damages payable under Section 8(a)(iii) hereof and that the Executive
makes the maximum allowable pre-tax contributions under the Qualified Plans),
over (B) the actuarial equivalent (using such actuarial assumptions) of the
Executive's actual employer-provided benefits (paid or payable), if any, under
the Qualified Plans and the SERP as of the date of such termination;

                                    (2)      for 36 months after such
termination, or such longer period as may be provided by the terms of the
appropriate plan, the Employers shall continue in effect all medical,
prescription, dental and life insurance plans for the benefit of the Executive
and, if applicable, the Executive's family, which would have been provided to
them in accordance with Section 4 of this Agreement if the Executive's
employment had not been terminated or, if more favorable to the Executive, as in
effect generally at any time after such termination with respect to executives
of the Employers and their families, provided, however, that if the Executive
becomes reemployed with another employer and is eligible to receive medical,
prescription or dental benefits under another employer provided plan, the
medical prescription and dental benefits described herein shall be secondary to
those provided under such other plan during such applicable period of
eligibility. For purposes of determining eligibility (but not the time of
commencement of benefits) of the Executive for retiree benefits pursuant to such
plans, the Executive shall be considered to have remained employed until 36
months after such termination and to have retired on the last day of such
period;

                                    (3)      the Employers shall, at their sole
expense as incurred, provide the Executive with outplacement services the scope
and provider of which shall be selected by the Executive in his sole discretion;
and

                                    (4)      the Employers shall continue in
effect for the benefit of the Executive all insurance or other provisions for
indemnification, defense or hold-harmless of officers or directors of the
Employers that were in effect on the date of such termination with respect to
all of his acts and omissions while an officer or director as fully and
completely as if such termination had not occurred, and until the final
expiration or running of all periods of limitation against action that may be
applicable to such acts or omissions.

                           (v)      If the Executive terminates his employment
with the Employers during the Employment Term for "Good Reason," such
termination shall be deemed to have been a termination by the Employers of the
Executive's employment without cause. "Good Reason" shall mean:

                                    (1)      the assignment to the Executive by
the Employers (or either of them) of duties materially inconsistent with the
Executive's position, duties, responsibilities, and status with the Employers, a
material adverse change in the Executive's titles or offices, any removal of the
Executive from or any failure to reelect the Executive to any of such positions,
except in connection with the termination of his employment for Cause, or any
action that would have a material adverse effect on the physical conditions in
which the Executive performs his employment duties;

                                    (2)      a reduction by the Employers in the
Executive's base salary as in effect on the date hereof or as the same may be
increased from time to time during the Employment Term;

                                    (3)      the taking of any action by the
Employers that would materially adversely affect the Executive's participation
in or materially reduce the Executive's benefits under any employee benefit plan
or deprive the Executive of any material fringe benefit enjoyed by the
Executive;



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                                    (4)      any requirement that the Executive
relocate to any place more than 50 miles away from the Bank's Troy, New York
location, or outside the State of New York, to perform his duties hereunder,
except for reasonably required travel by the Executive on the business of the
Employers;

                                    (5)      any other action or inaction that
constitutes a material breach by the Employers or either of them of this
Agreement;

                                    (6)      any failure by the Employers to
obtain the assumption of this Agreement by any acquirors, successors or assigns
of the Employers; or

                                    (7)      any failure by the Employers to
have renewed this Agreement pursuant to Section 5 hereof such that the remaining
Employment Term shall at any time be less than two years.

                  (b)      The Executive shall have no right to terminate his
employment under this Agreement before the end of the Employment Term, unless
(i) such termination is approved by the Boards or (ii) such termination is with
"Good Reason" as defined above. In the event that the Executive violates this
provision, the Employers shall be entitled, in addition to their other legal
remedies, to enjoin the employment of the Executive with any significant
competitor of the Employers (or either of them) for a period of one year or the
then remaining Employment Term plus six months, whichever is less. The term
"significant competitor" shall mean any commercial bank, savings bank, savings
and loan association, mortgage banking company or a holding company affiliate of
any of the foregoing which, at the date of its employment of the Executive, has
an office out of which the Executive would be primarily based that is located
within 35 miles of the Bank's home office. If any court or other tribunal having
jurisdiction to determine the validity or enforceability of this paragraph
determines that, strictly applied, it would be invalid or unenforceable, the
definition of "significant competitor" and the time provisions used shall be
deemed modified to the extent necessary (but only to that extent) so that the
restrictions in that subsection, as modified, will be valid and enforceable.

                  (c)      In the event the employment of the Executive is
terminated by the Employers without Cause under Section 8(a) hereof and the
Employers fail to make timely payment of the amounts then owed to the Executive
under this Agreement, the Executive shall be entitled to reimbursement for all
reasonable costs, including attorneys' fees, incurred by the Executive in taking
action to collect such amounts or otherwise to enforce this Agreement, plus
interest on such amounts at the rate of one percent above the prime rate
(defined as the base rate on corporate loans at large U.S. money center
commercial banks as published by The Wall Street Journal), compounded monthly,
for the period from the date of employment termination until payment is made to
the Executive. Such reimbursement and interest shall be in addition to all
rights which the Executive is otherwise entitled to under this Agreement.

                  (d)      In the event of the Executive's death during the
Employment Term, his estate shall be entitled to receive his salary for the
remaining Employment Term or six months, whichever is less. This Agreement shall
thereupon terminate, except that any vested rights of the Executive shall then
be exercised by his estate.

                  (e)      In the event the Executive becomes disabled during
the Employment Term under circumstances that would entitle him to benefits under
the Bank's long-term disability plan and, as a result of such disability, he is
unable to perform his duties hereunder for an uninterrupted period of more than
six months, the Employers may terminate the Executive's employment without
liability under Section 8(a) hereof and this Agreement shall thereupon
terminate. Any such termination shall not affect the Executive's rights to
benefits pursuant to any applicable long-term disability plan of the Employers.

                  (f)      Notwithstanding any other provision in this
Agreement, (i) the Employers may terminate or suspend this Agreement and the
employment of the Executive hereunder, as if such termination were for Cause
under Section 8(a) hereof, to the extent required by the applicable laws of the
State of New York related to banking, by applicable federal law relating to
deposit insurance or bank holding companies or by regulations or orders issued
by the New York State Banking Department, the Board of Governors of the Federal
Reserve System, the Federal Deposit Insurance Corporation or other state or
federal banking regulatory agency having jurisdiction over Troy Financial or the
Bank and (ii) no payment shall be required to be made to or for the benefit of
the Executive under this Agreement to the extent such payment is prohibited by
applicable law, regulation or order issued by a banking agency or a court of
competent jurisdiction; provided, that it shall be the Employers' burden to
prove that any such action was so required.

         9.       CERTAIN ADDITIONAL PAYMENTS BY THE EMPLOYERS.

                  (a)      Except as set forth below, in the event it shall be
determined that any payment or distribution by or for the account of the
Employers to or for the benefit of the Executive (whether paid or payable or
distributed or distributable pursuant to the terms of this Agreement or
otherwise, but determined without regard to any additional payments required
under this Section 9) (a "Payment") would be subject to the excise tax imposed
by Section 4999 of the Internal Revenue Code of 1986, as amended (the



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<PAGE>

"Code") or any interest or penalties are incurred by the Executive with respect
to such excise tax (such excise tax, together with any such interest and
penalties, collectively, the "Excise Tax"), then the Executive shall be entitled
to receive an additional payment (a "Gross-Up Payment") in an amount such that
after payment by the Executive of the Excise Tax and all other taxes (including,
without limitation, income taxes) that are imposed upon the Gross-Up Payment,
the Executive retains an amount of the Gross-Up Payment equal to the Excise Tax
imposed upon the Payments. Notwithstanding the foregoing provisions of this
Section 9(a), if it shall be determined that the Executive is entitled to a
Gross-Up Payment, but that the Executive, after taking into account the Payments
and the Gross-Up Payment, would not receive a net after-tax benefit of at least
$50,000 (taking into account both income taxes and any Excise Tax) as compared
to the net after-tax proceeds to the Executive resulting from an elimination of
the Gross-Up Payment and a reduction of the Payments, in the aggregate, to an
amount (the "Reduced Amount") such that the receipt of Payments would not give
rise to any Excise Tax, then no Gross-Up Payment shall be made to the Executive,
the Payments, in the aggregate, made to the Executive shall not exceed the
Reduced Amount, and the Executive shall have the right, in the Executive's sole
discretion, to designate those payments or benefits that should be reduced or
eliminated to satisfy such requirement.

                  (b)      Subject to the provisions of Section 9(c), all
determinations required to be made under this Section 9, including whether and
when a Gross-Up Payment is required and the amount of such Gross-Up Payment and
the assumptions to be utilized in arriving at such determination, shall be made
by KPMG LLP or such other certified public accounting firm as may be designated
by the Executive and shall be reasonably acceptable to the Employers (the
"Accounting Firm") which shall provide detailed supporting calculations both to
the Employers and the Executive within 15 business days of the receipt of notice
from the Executive that there has been a Payment, or such earlier time as is
requested by the Employers. In the event that the Accounting Firm is serving as
accountant or auditor for the individual, entity or group effecting a change in
the ownership or effective control (as defined for purposes of Section 280G of
the Code) of the Employers, the Executive shall appoint another nationally
recognized accounting firm which is reasonably acceptable to the Employers to
make the determinations required hereunder (which accounting firm shall then be
referred to as the Accounting Firm hereunder). All fees and expenses of the
Accounting Firm shall be borne solely by the Employers. Any Gross-Up Payment, as
determined pursuant to this Section 9, shall be paid by the Employers to the
Executive within five days of the receipt of the Accounting Firm's
determination. Any determination by the Accounting Firm shall be binding upon
the Employers and the Executive. As a result of the uncertainty in the
application of Section 4999 of the Code at the time of the initial determination
by the Accounting Firm hereunder, it is possible that additional Gross-Up
Payments shall be required to be made to compensate the Executive for amounts of
Excise Tax later determined to be due, consistent with the calculations required
to be made hereunder (an "Underpayment"). In the event that the Employers
exhaust their remedies pursuant to Section 9(c) and the Executive is required to
make a payment of any Excise Tax, the Accounting Firm shall determine the amount
of the Underpayment that has occurred and any such Underpayment shall be
promptly paid by the Employers to or for the benefit of the Executive.

                  (c)      The Executive shall notify the Employers in writing
of any claim by the Internal Revenue Service that, if successful, would require
the payment by the Employers of the Gross-Up Payment. Such notification shall be
given as soon as practicable but no later than 10 business days after the
Executive is informed in writing of such claim and shall apprise the Employers
of the nature of such claim and the date on which such claim is requested to be
paid. The Executive shall not pay such claim prior to the expiration of the
30-day period following the date on which it gives such notice to the Employers
(or such shorter period ending on the date that any payment of taxes with
respect to such claim is due). If the Employers notify the Executive in writing
prior to the expiration of such period that they desire to contest such claim,
the Executive shall:

                           (i)      give the Employers any information
reasonably requested by the Employers relating to such claim,

                           (ii)     take such action in connection with
contesting such claim as the Employers shall reasonably request in writing from
time to time, including, without limitation, accepting legal representation with
respect to such claim by an attorney reasonably selected by the Employers,

                           (iii)    cooperate with the Employers in good faith
in order effectively to contest such claim, and

                           (iv)     permit the Employers to participate in any
proceedings relating to such claim; provided, however, that the Employers shall
bear and pay directly all costs and expenses (including additional interest and
penalties) incurred in connection with such contest and shall indemnify and hold
the Executive harmless, on an after-tax basis, for any Excise Tax or income tax
(including interest and penalties with respect thereto) imposed as a result of
such representation and payment of costs and expenses.



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Without limiting the foregoing provisions of this Section 9(c), the Employers
shall control all proceedings taken in connection with such contest and, at
their sole option, may pursue or forgo any and all administrative appeals,
proceedings, hearings and conferences with the taxing authority in respect of
such claim and may, at their sole option, either direct the Executive to pay the
tax claimed and sue for a refund or contest the claim in any permissible manner,
and the Executive agrees to prosecute such contest to a determination before any
administrative tribunal, in a court of initial jurisdiction and in one or more
appellate courts, as the Employers shall determine; provided, however, that if
the Employers direct the Executive to pay such claim and sue for a refund, the
Employers shall advance the amount of such payment to the Executive, on an
interest-free basis and shall indemnify and hold the Executive harmless, on an
after-tax basis, from any Excise Tax or income tax (including interest or
penalties with respect thereto) imposed with respect to such advance or with
respect to any imputed income with respect to such advance; and further provided
that the Executive shall not be required to consent to any extension of the
statute of limitations relating to payment of taxes for the taxable year of the
Executive with respect to which such contested amount is claimed to be due
unless such extension is limited solely to such contested amount. Furthermore,
the Employers' control of the contest shall be limited to issues with respect to
which a Gross-Up Payment would be payable hereunder and the Executive shall be
entitled to settle or contest, as the case may be, any other issue raised by the
Internal Revenue Service or any other taxing authority.

                  (d)      If, after the receipt by the Executive of an amount
advanced by the Employers pursuant to Section 9(c), the Executive becomes
entitled to receive any refund with respect to such claim, the Executive shall
(subject to the Employers' complying with the material requirements of Section
9(c)) promptly pay to the Employers the amount of such refund (together with any
interest paid or credited thereon after taxes applicable thereto). If, after the
receipt by the Executive of an amount advanced by the Employers pursuant to
Section 9(c), a determination is made that the Executive shall not be entitled
to any refund with respect to such claim and the Employers do not notify the
Executive in writing of their intent to contest such denial of refund prior to
the expiration of 30 days after such determination, then such advance shall be
forgiven and shall not be required to be repaid and the amount of such advance
shall offset, to the extent thereof, the amount of Gross-Up Payment required to
be paid.

         10.      CONFIDENTIAL INFORMATION.

                  (a)      The Executive acknowledges that the information,
observations and data obtained by the Executive concerning the business and
affairs of the Employers during the course of the Executive's employment are the
property of the Employers, including information concerning acquisition
opportunities in or reasonably related to the business or industry of the
Employers of which the Executive becomes aware during such period. Therefore,
the Executive agrees that he will not at any time (whether during or after the
Employment Term) disclose to any unauthorized person or, directly or indirectly,
use for the Executive's own account, any of such information, observations or
data without the consent of the Boards, unless and to the extent that the
aforementioned matters become generally known to and available for use by the
public other than as a direct or indirect result of the Executive's acts or
omissions to act or the acts or omissions to act of other employees of the
Employers. The Executive agrees to deliver to the Employers at the termination
of the Executive's employment, or at any other time the Employers may request in
writing (whether during or after the Employment Term), all memoranda, notes,
plans, records, reports and other documents, regardless of the format or media
(and copies thereof), relating to the business of the Employers and their
predecessors (including, without limitation, all acquisition prospects, lists
and contact information) which the Executive may then possess or have under the
Executive's control.

                  (b)      The Executive acknowledges that the restrictions
contained in this Section 10 hereof are reasonable and necessary, in view of the
nature of the Employers' business, in order to protect the legitimate interests
of the Employers, and that any violation thereof would result in irreparable
injury to the Employers. Therefore, the Executive agrees that in the event of a
breach or threatened breach by the Executive of the provisions of Section 10(a)
hereof, the Employers shall be entitled to obtain from any court of competent
jurisdiction, preliminary or permanent injunctive relief restraining the
Executive from disclosing or using any such confidential information. Nothing
herein shall be construed as prohibiting the Employers from pursuing any other
remedies available to them for such breach or threatened breach, including,
without limitation, recovery of damages from the Executive.

         11.      MISCELLANEOUS.

                  (a)      No Assignment. This Agreement is personal to each of
the parties hereto. No party may assign or delegate any of his or its rights or
obligations hereunder without first obtaining the written consent of the other
party hereto. However, in the event of the death of the Executive, all of his
rights to receive payments hereunder shall become rights of his estate as
provided in Section 8(d) hereof. Subject to the provisions hereof restricting
assignment, this Agreement shall be binding upon the parties hereto and shall
inure to the benefit of the parties and their respective heirs, devisees,
executors, administrators, legal representatives, successors and assigns.



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<PAGE>

                  (b) Other Contracts. The Executive shall not, during the
Employment Term, have any other paid employment other than with a subsidiary or
affiliate of the Employers, except with the prior written approval of the
Boards.

                  (c) Amendments or Additions; Action by Boards. No amendments
or additions to this Agreement shall be binding unless in writing and signed by
all parties hereto. The prior approval by a majority affirmative vote of the
Boards shall be required in order for the Employers to authorize any amendments
or additions to this Agreement, to give any consents or waivers of provisions of
this Agreement, or to take any other action under this Agreement including any
termination of employment with or without Cause under Section 8(a) hereof.

                  (d) Section Headings. The section 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.

                  (e) 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.

                  (f) Entire Agreement; Prior Agreement. This Agreement
constitutes the entire agreement between the parties respecting the employment
of the Employee, there being no representations, warranties or commitments
except as set forth herein. The Prior Agreement is hereby replaced and
superceded and shall be of no further force or effect after the date hereof,
except that nothing in this Agreement shall affect the Employee's right to
payments pursuant to Section 7(d)(1) of the Prior Agreement.

                  (g) Governing Law. This Agreement shall be governed by the
laws of the United States, where applicable, and otherwise by the laws of the
State of New York applicable to contracts entered into and performed wholly
within its borders.

                  (h) Notice. All notices, demands, requests, or other
communications which may be or are required to be given, served, or sent by any
party to any other party pursuant to this Agreement shall be in writing and
shall be hand delivered, sent by overnight courier or mailed by first-class,
registered or certified mail, return receipt requested, postage prepaid, or
transmitted by telegram, telecopy or telex, addressed as follows:

                         (I) IF TO THE EMPLOYERS:

                                  THE TROY SAVINGS BANK
                                  32 Second Street
                                  Troy, New York  12180
                                  Attention:  Chairman of the Board of Directors

                             WITH A COPY (WHICH SHALL NOT CONSTITUTE NOTICE) TO:
                                  Stuart G. Stein
                                  Hogan & Hartson, L.L.P.
                                  555 13th Street, N.W.
                                  Washington, D.C.  20004-1190
                                  Fax:  202/637-5910

                         (ii) If to the Executive:

                                  David J. DeLuca
                                  32 Second Street
                                  Troy, New York  12180

         Each party may designate by notice in writing a new address to which
any notice, demand, request or communication may thereafter be so given, served
or sent. Each notice, demand, request, or communication which shall be hand
delivered, sent, mailed, telecopied or telexed in the manner described above, or
which shall be delivered to a telegraph company, shall be deemed sufficiently
given, served, sent, received or delivered for all purposes at such time as it
is delivered to the addressee (with the return receipt, the delivery receipt, or
(with respect to a telecopy or telex) the answerback being deemed conclusive,
but not exclusive, evidence of such delivery) or at such time as delivery is
refused by the addressee upon presentation.



                                      -7-
<PAGE>

                  (i) Counterparts. This Agreement may be executed in several
counterparts, for the convenience of the parties, but shall constitute one and
the same instrument.

         IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement, or caused this Agreement to be duly executed on their behalf, as of
the date and year first above written.

Attest:                                THE TROY SAVINGS BANK


/s/ Linda A. Comstock                  By: /s/ Daniel J. Hogarty Jr.
------------------------------             President and Chief Executive Officer

Attest:                                TROY FINANCIAL CORPORATION


/s/  Linda A. Comstock                 By: /s/ Daniel J. Hogarty Jr.
------------------------------             President, Chairman & Chief Executive
                                           Officer

                                       By: /s/ David J. DeLuca
                                           Executive


                                      -8-