TSR, INC. AND SUBSIDIARIES
                        EXHIBIT 10 TO REPORT ON FORM 10-Q
                                 AUGUST 31, 2001

                              EMPLOYMENT AGREEMENT

     AGREEMENT effective this 1st day of June, 2001 by and between TSR, Inc., a
Delaware corporation, with offices at 400 Oser Avenue, Hauppauge, New York 11788
(hereinafter called the "Corporation") and Ernest G. Bago, residing at
xxxxxxxxxx (hereinafter called "Executive").

                              W I T N E S S E T H :

     WHEREAS, the Corporation desires to employ Executive and Executive is
willing to undertake such employment on the terms and subject to the conditions
hereinafter set forth.

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

1.   The Corporation hereby employs Executive as President of the Corporation or
     such other position as he may be elected or appointed to by the
     Corporation's Board of Directors, to perform such supervisory or executive
     duties on behalf of the Corporation as the Board of Directors of the
     Corporation may from time to time determine.

2.   Executive hereby accepts such employment and agrees that throughout the
     period of his employment hereunder, he will devote his full time,
     attention, knowledge and skills, faithfully, diligently and to the best of
     his ability, in furtherance of the business of the Corporation and to
     promote the interest of the Corporation, will perform the duties assigned
     to him pursuant to Paragraph 1 hereof, subject, at all times, to the
     direction and control of the Board of Directors of the Corporation.
     Executive shall at all times be subject to, observe and carry out such
     rules, and regulations as the Corporation from time to time shall
     establish. During the period of Executive's employment hereunder, Executive
     shall not be entitled to additional compensation for serving in any office
     of the Corporation or any of its subsidiaries or parent corporation to
     which he is elected, including without limitation as a director of the
     Corporation or parent corporation.

3.   Executive shall be employed for a term of four (4) years commencing as of
     the 1st day of June, 2001 and ending on the 31st day of May, 2005 (the
     "Term"), unless his employment is terminated prior to the expiration of the
     Term pursuant to the provisions hereof.


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4.   As full compensation for his services hereunder, the Corporation will pay
     to Executive a salary (the "Base Salary") at the rate of Two Hundred
     Thousand ($200,000) Dollars per annum, payable in equal installments in
     arrears no less frequently than semi-monthly. In addition, the parent
     corporation's Board of Directors, shall in good faith, prior to the end of
     each contract year consider and cause the Corporation to grant to Executive
     a discretionary bonus, based upon standards which the President of the
     parent corporation shall establish with Executive at the beginning of the
     contract year and may be modified thereafter. The bonus provided for
     hereunder shall be payable by the Corporation to Executive within 120 days
     of the end of the contract year, for the period to which such bonus
     relates. In addition, Executive shall be entitled to participate, to the
     extent he is eligible under the terms and conditions thereof, in any
     pension, profit-sharing, retirement, hospitalization, insurance, medical
     services, or other employee benefit plan generally available to executives
     of the Corporation which may be in effect from time to time during the
     period of his employment hereunder. The Corporation shall be under no
     obligation to institute or continue the existence of any such employee
     benefit plan. Executive also shall be entitled to a car (leased or owned at
     sole discretion of the Corporation) and payment or reimbursement of a
     country club membership in such amounts for the car and the country club
     membership as shall be determined by the Board of Directors of the
     Corporation and executive medical benefits. Any or all of such entitlements
     may be discontinued at the end of any contract year at the discretion of
     the Chairman.

5.   The Corporation shall reimburse Executive for all expenses reasonably
     incurred by him in connection with the performance of his duties hereunder
     and the business of the Corporation, upon the submission to the Corporation
     of appropriate vouchers therefor and approval thereof by the Treasurer of
     the Corporation. Such reimbursements shall be subject to the expense
     reimbursement policies of the Corporation which are in effect from time to
     time. Executive shall be entitled to three (3) weeks vacation time per
     annum in accordance with the regular procedures of the Corporation
     governing executive officers as determined from time to time by the
     Corporation's Board of Directors.

6.   (a) Notwithstanding any provision contained herein to the contrary, if on
     or after the date hereof and prior to the end of the Term, Executive is
     terminated for "Cause" (as defined below) then the Corporation shall have
     the right to give notice of termination of Executive's services hereunder
     as of a date to be specified in such notice and this Agreement shall
     terminate as of the date so specified. Termination for "Cause shall mean
     Executive shall (i) be charged with a felony crime, (ii) commit any act or
     omit to take any action in bad faith and to the detriment of the
     Corporation, (iii) commit an act of fraud against the Corporation or (iv)
     materially breach any term of this Agreement and fail to correct such
     breach within ten days after written notice of commission thereof.


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     (b) If, during the Term, Executive is unable to perform his duties
     hereunder on account of illness, accident or other physical or mental
     incapacity and such illness or other incapacity shall continue for a period
     of six (6) consecutive months or an aggregate of one hundred and eighty
     (180) days in any consecutive twelve (12) month period, the Corporation
     shall have the right, on fifteen (15) days written notice (given after such
     period) to Executive, to terminate this Agreement. In such event, the
     Corporation shall be obligated to pay to Executive his Base Salary for the
     calendar month in which such termination occurs. However, if prior to the
     date specified in such notice, Executive's illness or incapacity shall have
     terminated and he shall have taken up the performance of his duties
     hereunder, Executive shall be entitled to resume his employment hereunder,
     as though such notice had not been given.

     (c) In the event of Executive's death during the Term, this Agreement shall
     terminate immediately, and Executive's legal representatives shall be
     entitled to receive his Base Salary for the calendar month during which his
     death shall have occurred together with any approved expenses as
     contemplated under Section 5 and as may otherwise be provided under any
     insurance policy or similar instrument.

     (d) In the event that this Agreement is terminated for "Cause" pursuant to
     Section 6(a), then Executive shall be entitled to receive only his Base
     Salary for the month in which such termination shall take effect.

     (e) In the event the Corporation terminates Executive for any reason other
     than as provided under Section 6(a), (b), or (c), then this Agreement shall
     terminate upon thirty (30) days' written notice to Executive and the
     Corporation shall be obligated to pay to Executive an amount equal to any
     unpaid, approved expenses as contemplated under Section 5 and a severance
     payment equal to twelve (12) month's salary at the Base Salary, payable in
     twelve (12) equal monthly installments. Notwithstanding the foregoing, if
     Executive obtains employment within the one (1) year period following
     termination, the severance payment payable by the Corporation hereunder
     shall be reduced to the extent of the compensation received by Executive
     from such employment. Executive shall use best efforts to obtain substitute
     employment in a timely manner following termination.

     In the event the Corporation terminates Executive for any reason other than
     as provided under Section 6(a), (b), or (c), Executive will remain eligible
     for a period of one year after termination to participate in the health
     benefit program provided to all employees of the Corporation which may then
     be in effect. The health benefit program will be paid by the Corporation.


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7.   In the event of a "Change in Control of the Corporation" whereas (a) the
     shareholders of the Corporation approve a merger or consolidation involving
     the Corporation resulting in a change of ownership of a majority of the
     outstanding shares of capital stock of the Corporation, or (b) the
     shareholders of the Corporation approve a plan of liquidation or
     dissolution of the Corporation or the sale or disposition by the
     Corporation of all or substantially all the Corporation's assets or (c)
     there has been a public announcement of a Change in Control of the
     Corporation (provided, however, that consummation of the Change in Control
     of the Corporation shall be a condition precedent to the effectiveness of
     this provision) and the acquiring or surviving corporation does not assume
     all of the Corporation's rights and obligations under this Agreement, then:

     (i)  the Corporation shall pay to Executive his full salary through the
          date of termination at the Base Salary in effect at the time notice of
          termination is given plus his bonus prorated through the date of
          termination; and

     (ii) in lieu of any further salary or bonus payments to Executive for
          periods subsequent to the date of termination, the Corporation shall
          pay within 60 days of the date of termination as severance pay to
          Executive, $1,000,000, if the termination occurs in fiscal 2002
          providing the year-to-date pre-tax profit of the Corporation exceeds
          $200,000 for the month of June, $410,000 for the month of July,
          $710,000 for the month of August, $896,000 for the month September,
          $1,190,000 for the month of October, $1,498,000 for the month of
          November, $1,702,000 for the month of December, $1,925,000 for the
          month of January, $2,169,000 for the month of February, $2,433,000 for
          the month of March, $2,730,000 for the month of April, and $3,000,000
          for the month of May.

          If the termination occurs in fiscal 2003, then the Executive will
          receive severance of $750,000, providing the year-to-date profit of
          the Corporation exceeds $242,000 for the month of June, $494,000 for
          the month of July, $836,000 for the month of August, $1,064,000 for
          the month of September, $1,400,000 for the month October, $1,750,000
          for the month of November, $1,996,000 for the month of December,
          $2,261,000 for the month of January, $2,547,000 for the month of
          February, $2,853,000 for the month of March, $3,192,000 for the month
          of April and $3,500,000 for the month of May.

          If the termination occurs in fiscal 2004, then a similar year-to-date
          monthly schedule will be developed by the Chairman with $4,000,000 as
          the minimum pre-tax profit for the fiscal year and a severance of
          $500,000.

          If the termination occurs in fiscal 2005, then a similar year-to-date
          monthly schedule will be developed by the Chairman with $4,500,000 as
          the minimum pre-tax profit for the fiscal year and a severance of
          $250,000.


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8.   The Corporation and Executive are on this day entering into a Maintenance
     of Confidence and Non-Compete Agreement, the terms of which are hereby
     expressly incorporated into this Agreement, provided, however, that the
     Maintenance of Confidence and Non-Compete Agreement shall continue to be
     effective notwithstanding any termination of Executive's employment
     hereunder and shall continue in effect upon expiration of this Agreement
     pursuant to the terms of the Maintenance of Confidence and Non-Compete
     Agreement.

9.   (a) The Corporation shall have the right from time to time to purchase,
     increase, modify or terminate insurance policies on the life of Executive
     for the benefit of the Corporation, in such amounts as the Corporation
     shall determine in its sole discretion.

     (b) In connection with paragraph 9(a) above, Executive shall, at such time
     or times and at such place or places as the Corporation may reasonably
     direct, submit himself to such physical examinations and Executive shall
     deliver such documents as the Corporation may deem necessary or desirable.

10.  Executive shall hold in a fiduciary capacity for the benefit of the
     Corporation all information, knowledge and data relating to or concerned
     with its operations, sales, business and affairs, and he shall not, at any
     time hereafter, use, disclose or divulge any such information, knowledge or
     data to any person, firm or corporation other than the Corporation or its
     designees or except as may otherwise be required in connection with the
     business and affairs of the Corporation.

11.  The parties hereto acknowledge that Executive's services are unique and
     that, in the event of a breach by Executive of any of his obligations under
     this Agreement, the Corporation will not have an adequate remedy at law.
     Accordingly, in the event of any such breach or threatened breach by
     Executive, the Corporation shall be entitled to such equitable and
     injunctive relief as may be available to restrain Executive from the
     violation of the provisions thereof. Nothing herein shall be construed as
     prohibiting the Corporation from pursuing any other remedies at law or in
     equity for such breach or threatened breach, including the recovery of
     damages and the immediate termination of the employment of Executive
     hereunder.

12.  This Agreement together with the Maintenance of Confidence and Non-Compete
     Agreement executed on the same date hereof, constitute the entire agreement
     of the parties hereto with respect to the subject matter hereof and no
     amendment or modification hereof shall be valid or binding unless made in
     writing and signed by the party against whom enforcement thereof is sought.

13.  Any notice required, permitted or desired to be given pursuant to any of
     the provisions of this Agreement shall be deemed to have been sufficiently
     given or served for all purposes if delivered in person or sent by
     certified mail, return receipt requested, postage and fees prepaid as
     follows:


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     If to the Corporation at:

          Chairman of the Board
          TSR Consulting Services, Inc.
          400 Oser Avenue
          Hauppauge, New York 11788

     With a copy to:

          Mr. John Sharkey
          Vice President of Finance
          TSR Consulting Services, Inc.
          400 Oser Avenue
          Hauppauge, New York 11788

     If to the Executive at:

          Mr. Ernest G. Bago
          6 Greenbriar Lane
          Montvale, New Jersey 07645

     Either of the parties hereto may at any time and from time to time change
     the address to which notice shall be sent hereunder by notice to the other
     party given under this paragraph 13. The date of the giving of any notice
     sent by mail shall be the date of the posting of the mail.

14.  Neither this Agreement nor the right to receive any payments hereunder may
     be assigned by Executive. This Agreement shall be binding upon Executive,
     his heirs, executors and administrators and upon the Corporation, its
     successors and assigns.

15.  No course of dealing nor any delay on the part of the Corporation in
     exercising any rights hereunder shall operate as a waiver of any such
     rights. No waiver of any default or breach of this Agreement shall be
     deemed a continuing waiver or a waiver of any other breach or default.

16.  This Agreement shall be governed, interpreted and construed in accordance
     with the laws of the State of New York applicable to agreements entered
     into and to be performed entirely therein.

17.  If any clause, paragraph, section or part of this Agreement shall be held
     or declared to be void, invalid or illegal, for any reason, by any court of
     competent jurisdiction, such provisions shall be ineffective but shall not
     in any way invalidate or affect any other clause, paragraph, section or
     part of this Agreement.


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18.  Executive acknowledges that he is not subject to any agreement which would
     in any way restrict him from carrying out his employment as contemplated
     hereunder.

19.  This Agreement supersedes any prior employment agreement.



     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day in year first above written.


/s/ ERNEST G. BAGO
------------------------------------
    Ernest G. Bago
    Executive




TSR, Inc.


By:   /s/ J.F. HUGHES
     -------------------------------
     Name:  J.F. Hughes
     Title: Chairman