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                              EMPLOYMENT AGREEMENT


                                 BY AND BETWEEN


                               T R FINANCIAL CORP.


                                       AND


                                  IRA H. KRAMER







                           Amended and Restated as of
                                January 23, 1997
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                               T R FINANCIAL CORP.

                    AMENDED AND RESTATED EMPLOYMENT AGREEMENT


            This AGREEMENT is made effective as of January 23, 1997 by and
between T R Financial Corp., a corporation organized under the laws of the State
of Delaware (the "Company") with its principal administrative office at 1122
Franklin Avenue, Garden City, New York, which is the holding company for the
Roosevelt Savings Bank (the "Bank"), and Ira H. Kramer (the "Executive"). This
Agreement amends and restates the Employment Agreement dated October 13, 1995 by
and between the Company and the Executive. Any reference to "Bank" shall mean
Roosevelt Savings Bank or any successor thereto.

            WHEREAS, the Company wishes to assure itself of the services of
Executive for the period provided in this Agreement; and

            WHEREAS, Executive is willing to serve in the employ of the Company
on a full-time basis for said period;

            NOW, THEREFORE, in consideration of the mutual covenants herein
contained, and upon the other terms and conditions hereinafter provided, the
parties hereby agree as follows:

            1.    POSITION AND RESPONSIBILITIES.

            During the period of his employment hereunder, Executive agrees to
serve as Senior Vice President and Corporate Secretary of the Company. The
Executive shall render administrative and management services to the Company
such as are customarily performed by persons situated in a similar executive
capacity and shall perform such other duties not inconsistent with his title and
office as may be assigned to him by or under the authority of the Board of
Directors of the Company (the "Board"). The Executive shall have such authority
as is necessary or appropriate to carry out his assigned duties. Failure to
reelect Executive as Senior Vice President and Corporate Secretary of the
Company, without the consent of the Executive shall constitute a breach of this
Agreement.

            2.    TERMS.

            (a) The period of Executive's employment under this Agreement shall
be deemed to have commenced as of the date first above written (the "Effective
Date") and shall continue for a period of twenty-four (24) full calendar months
thereafter. Commencing with the Effective Date, the term of this Agreement shall
be extended for one day each day until such time as the Board or the Executive
elects not to extend the term of the Agreement further by giving written notice
to the other party in accordance with Section 9, in which case the term of this
Agreement shall become fixed and shall end on the second anniversary of the date
of such written notice; provided, that in any event, the term of this Agreement
shall end on the last day of the month in which the Executive attains the age of
65. For purposes of this Agreement, the term "Employment Period" shall mean the
term of this Agreement plus such extensions as are provided herein.

            (b) During the period of his employment hereunder, except for
periods of absence occasioned by illness, disability, holidays, reasonable
vacation periods, and reasonable leaves of absence, Executive shall devote
substantially all his business time, attention, skill and efforts to the
faithful performance of his duties hereunder including (i) service as Senior
Vice President and Corporate Secretary of the Company, (ii) performance of such
duties not inconsistent with his title and office as may be assigned to him by
the Chairman of the Board or by or under the authority of the Board, and (iii)
such other activities and services related to the organization, operation and
management of the Company.
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During the Employment Period it shall not be a violation of this Agreement for
the Executive to (A) serve on corporate, civic, industry or charitable boards or
committees, (B) deliver lectures, fulfill speaking engagements or teach at
educational institutions and (C) manage personal investments, so long as such
activities do not significantly interfere with the performance of the
Executive's responsibilities as an employee of the Company in accordance with
this Agreement. It is expressly understood and agreed that to the extent that
any such activities have been conducted by the Executive prior to the Effective
Date, the continued conduct of such activities (or the conduct of activities
similar in nature and scope thereto) subsequent to the Effective Date shall not
thereafter be deemed to interfere with the performance of the executive's
responsibilities to the Company. It is also expressly agreed that the Executive
may conduct activities subsequent to the Effective Date that are generally
accepted for an executive in his position, regardless of whether conducted by
the Executive prior to the Effective Date.

            (c) Notwithstanding anything herein contained to the contrary: (i)
Executive's employment with the Company may be terminated by the Company or
Executive during the term of this Agreement, subject to the terms and conditions
of this Agreement; and (ii) nothing in this Agreement shall mandate or prohibit
a continuation of Executive's employment following the expiration of the term of
this Agreement upon such terms and conditions as the Board and Executive may
mutually agree.

            (d) Upon the termination of Executive's employment with the Company,
the daily extensions provided pursuant to Section 2(a) shall cease (if such
extensions have not previously ceased), and, if such termination is under
circumstances described in Section 4(a) or section 5(b), the term "unexpired
Employment Period" shall mean the period of time commencing from the date of
such termination and ending on the last day of the Employment Period computed
with reference to all extensions prior to such termination.

            (e) In the event that Executive's duties and responsibilities with
respect to the Bank are temporarily or permanently terminated pursuant to
Section 8 of the Employment Agreement dated January 23, 1997, as it may be
amended from time to time, between Executive and the Bank ("Bank Agreement") and
the course of conduct upon which such termination is based would not constitute
grounds for Termination for Cause under Section 8, then Executive shall, to the
extent practicable, assume such duties and responsibilities formerly performed
at the Bank as part of his duties and responsibilities as Senior Vice President
and Corporate Secretary of the Company. Nothing in this provision shall be
interpreted as restricting the Company's right to remove Executive for Cause in
accordance with Section 8.

            3.    COMPENSATION AND REIMBURSEMENT.

            (a) The compensation specified under this Agreement shall constitute
the salary and benefits paid for the duties described in Section 1. The Company
shall pay Executive as compensation a salary at an annual rate of not less than
$155,000 per year or such higher rate as may be prescribed by or under the
authority of the Board ("Base Salary"). The annual salary payable under this
Section 3 shall be paid in approximately equal installments in accordance with
the Company's customary payroll practices. During the period of this Agreement,
Executive's Base Salary shall be reviewed at least annually; the first such
review will be made no later than one year from the date of this Agreement. Such
review shall be conducted by a Committee designated by the Board, and the Board
may increase Executive's Base Salary, which increased amount shall be considered
the Executive's Base Salary for purposes of this Agreement. In no event shall
Executive's annual rate of salary under this Agreement in effect at a particular
time be reduced without his prior written consent. In addition to the Base
Salary provided in this Section 3(a), the Company shall provide Executive at no
cost to Executive with all such other benefits as are provided uniformly to
permanent full-time employees of the Bank.

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            (b) The Company will provide Executive with employee benefit plans,
arrangements and perquisites substantially equivalent to those in which
Executive was participating or otherwise deriving benefit from immediately prior
to the beginning of the term of this Agreement, and the Company will not,
without Executive's prior written consent, make any changes in such plans,
arrangements or perquisites which would adversely affect Executive's rights or
benefits thereunder. Without limiting the generality of the foregoing provisions
of this Subsection (b), Executive will be entitled to participate in or receive
benefits under any employee benefit plans including, but not limited to, the
Roosevelt Savings Bank Salary Reduction Plan in RSI Retirement Trust, the T R
Financial Corp. Employee Stock Ownership Plan, the Roosevelt Savings Bank
Recognition and Retention Plan for Officers, the T R Financial Corp. 1993
Incentive Stock Option Plan, retirement plans, supplemental retirement plans,
pension plans, profit-sharing plans, health-and-accident plans, alternative
recovery programs, group life, health coverage (including hospitalization,
medical and major medical), prescription drug, dental and long-term disability
insurance plans, or any other employee benefit plan or arrangement made
available by the Company in the future to its senior executives and key
management employees, subject to and on a basis consistent with the terms,
conditions and overall administration of such plans and arrangements. Executive
will be entitled to incentive compensation and bonuses as provided in any plan
of the Company in which Executive is eligible to participate. Nothing paid to
the Executive under any such plan or arrangement will be deemed to be in lieu of
other compensation to which the Executive is entitled under this Agreement.

            (c) Executive's principal place of employment shall be at the
Company's executive offices at the address first above written, or at such other
location in New York City or in Nassau, Suffolk or Westchester County at which
the Company shall maintain its principal executive offices, or at such other
location as the Board and Executive may mutually agree upon. The Company shall
provide Executive, at his principal place of employment, with a private office,
stenographic services and other support services and facilities suitable to his
position with the Company and necessary or appropriate in connection with the
performance of his assigned duties under this Agreement. The Company shall
reimburse Executive for his ordinary and necessary business expenses, including,
without limitation, fees for memberships in such clubs and organizations as
Executive and the Board shall mutually agree are necessary and appropriate for
business purposes, and travel and entertainment expenses, incurred in connection
with the performance of his duties under this Agreement, upon presentation to
the Company of an itemized account of such expenses in such form as the Company
may reasonably require.

            (d) In the event that Executive assumes additional duties and
responsibilities pursuant to Section 2(e) by reason of one of the circumstances
contained in Section 2(e), and the Executive receives or will receive less than
the full amount of compensation and benefits formerly entitled to him under the
Bank Agreement, the Company shall assume the obligation to provide Executive
with his compensation and benefits in accordance with the Bank Agreement less
any compensation and benefits received from the Bank, subject to the terms and
conditions of this Agreement including the Termination for Cause provisions in
Section 8.

            4.    PAYMENTS TO EXECUTIVE UPON AN EVENT OF TERMINATION.

            The provisions of this Section shall in all respects be subject to
the terms and conditions stated in Sections 8 and 15.

            (a) Upon the occurrence of an Event of Termination (as herein
defined) during the Executive's term of employment under this Agreement, the
provisions of this Section shall apply. As used in this Agreement, an "Event of
Termination" shall mean and include any one or more of the following: (i) the
termination by the Bank or the Company of Executive's full-time employment
hereunder for any reason other than: following a Change in Control, as defined
in Section 5; for

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Disability, as defined in Section 6; for Retirement, as defined in Section 7;
for Cause, as defined in Section 8; or upon Executive's death; or (ii) unless
consented to by the Executive, Executive's voluntary resignation from the
Company's employ, upon any: (A) failure to elect or reelect or to appoint or
reappoint Executive as Senior Vice President and Corporate Secretary of the
Company, (B) material adverse change in Executive's function, duties, or
responsibilities, which change would cause Executive's position to become one of
lesser responsibility, importance, or scope from the position and attributes
thereof described in Section 1, above (and any such material change shall be
deemed a continuing breach of this Agreement), (C) relocation of Executive's
principal place of employment by more than 30 miles from its location at the
Effective Date of this Agreement, or a material reduction in the benefits and
perquisites to the Executive from those being provided as of the Effective Date
of this Agreement, (D) liquidation or dissolution of the Bank or Company, or (E)
material breach of this Agreement by the Company. Upon the occurrence of any
event described in clauses (A), (B), (C), (D) or (E), above, Executive shall
have the right to elect to terminate his employment under this Agreement by
resignation upon written notice pursuant to Section 9 given within a reasonable
period of time not to exceed, except in case of a continuing breach, four
calendar months after the event giving rise to said right to elect.

            (b) Upon the occurrence of an Event of Termination as set forth in
Section 4(a), on the Date of Termination, as defined in Section 9, the Company
shall be obligated to pay, or to provide, Executive, or, in the event of his
subsequent death, to his surviving spouse or such other beneficiary or
beneficiaries as Executive may designate in writing, or if neither his estate,
as severance pay or liquidated damages, or both, the benefits provided below and
a payment equal to the sum of the payments set forth below:

          (i)     his earned but unpaid salary as of the date of the termination
                  of his employment with the Company;

         (ii)     the benefits, if any, to which he is entitled as a former
                  employee under the Bank's or Company's employee benefit plans
                  and programs and compensation plans and programs;

        (iii)     continued group life, health (including hospitalization,
                  medical and major medical), prescription drug, dental and
                  long-term disability insurance benefits as provided by the
                  Bank or the Company, in addition to that provided pursuant to
                  Section 4(b)(ii), if and to the extent necessary to provide
                  for Executive, for the remaining unexpired Employment Period,
                  coverage equivalent to the coverage to which he would have
                  been entitled if he had continued working for the Company
                  during the remaining unexpired Employment Period at the
                  highest annual rate of salary achieved during the Employment
                  Period;

         (iv)     a lump sum payment, as liquidated damages in an amount equal
                  to the present value of the salary that Executive would have
                  earned if he had continued working for the Bank and the
                  Company during the remaining unexpired Employment Period at
                  Executive's Base Salary at the Date of Termination where such
                  present value is to be determined using a discount rate of 6%;

          (v)     a lump sum payment in an amount equal to the excess, if any,
                  of: (A) the present value of the benefits to which he would be
                  entitled under the Bank's or the Company's retirement plan
                  (and any other defined benefit plan maintained by the Bank or
                  the Company) if he had continued working for the Company
                  during the remaining unexpired Employment Period earning the
                  Base Salary at the Date of Termination during the remaining
                  unexpired Employment Period over (B) the

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                  present value of the benefits to which he is actually entitled
                  under the Bank's or the Company's retirement plan (and any
                  other defined benefit plan maintained by the Bank or the
                  Company) as of the date of his termination, where such present
                  values are to be determined using a discount rate of 6% and
                  the mortality tables prescribed under section 72 of the
                  Internal Revenue Code of 1986, as amended ("Code");

          (vi)    a lump sum payment in an amount equal to the present value of
                  the Bank's or the Company's contributions that would have been
                  made on his behalf under the Bank's or the Company's 401(k)
                  savings plan (and any other defined contribution plan
                  maintained by the Bank or the Company) if he had continued
                  working for the Bank and the Company during the remaining
                  unexpired Employment Period earning the Base Salary at the
                  Date of Termination during the remaining unexpired Employment
                  Period and making the maximum amount of employee contributions
                  required, if any, under such plan or plans, where such present
                  values are to be determined using a discount rate of 6%;

         (vii)    a lump sum payment in an amount equal to the excess, if any,
                  of (A) the present value of benefits to which he would be
                  entitled under any supplemental executive retirement plan or
                  any other excess benefit plan, within the meaning of section
                  3(36) of the Employee Retirement Income Security Act of 1974,
                  as amended ("ERISA"), and any plan to provide deferred income
                  for a select group of management or highly compensated
                  employees adopted by the Bank or the Company, if he had
                  continued working for the Bank or the Company during the
                  remaining unexpired Employment Period earning the Base Salary
                  at the date of termination during the remaining unexpired
                  Employment Period over (B) the present value of the benefits
                  to which he is actually entitled under any such plans, as of
                  the Date of Termination of his employment with the Company,
                  where such present values are to be determined using a
                  discount rate of 6% and the mortality tables prescribed under
                  section 72 of the Code; and

        (viii)    the payments that would have been made to Executive under all
                  incentive compensation plans and programs adopted by the Bank
                  or the Company if he had continued working for the Bank and
                  the Company during the remaining unexpired Employment Period
                  and had earned an incentive award in each calendar year that
                  ends during the remaining unexpired Employment Period in an
                  amount equal to the product of (A) the average percentage rate
                  of incentive compensation award (as a percentage of base
                  salary) for each such calendar year for the four highest
                  compensated officers of the Bank or the Company under such
                  incentive compensation plans and programs, multiplied by (B)
                  the salary that would have been paid to Executive during each
                  such calendar year, which shall not be less than the
                  Executive's Base Salary at the date of termination, such
                  payments to be made at the same time and in the same manner as
                  payments are made to other officers of the Bank or the Company
                  pursuant to the terms of such incentive compensation plans and
                  programs; provided, however, that payments under this Section
                  4(b)(viii) shall not be made to Executive for any year in
                  which no incentive compensation payments are made to any of
                  the Company's officers as a result of the performance of the
                  Company; provided further, that, if a Change in Control of the
                  Bank or the Company as defined in Section 5 has occurred,
                  payments shall be made to Executive under this Section
                  4(b)(viii) during each calendar year without regard to whether
                  such payments are made to

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                  any of the Bank's or the Company's officers and without regard
                  to whether such incentive compensation plans and programs have
                  been amended or terminated, in an amount that is not less that
                  the product of (A) the maximum percentage rate at which an
                  award was ever available to Executive under such incentive
                  compensation plans or programs, multiplied by (B) the salary
                  that would have been paid to Executive during each such
                  calendar year, which shall not be less than Executive's Base
                  Salary at the date of Termination.

The benefits to be provided under, and the amounts payable pursuant to, this
Section 4 shall be provided and be payable without regard to proof of damages
and without regard to the Executive's efforts, if any, to mitigate damages. The
Company and Executive hereby stipulate that the damages which may be incurred by
Executive following any such termination of employment are not capable of
accurate measurement as of the date first above written and that such liquidated
damages constitute reasonable damages under the circumstances.

            (c) Payments to Executive under Section 4 shall be made within ten
days of the Executive's Date of Termination.

            (d) In the event payments are made under Section 4 or Section 5, the
Executive may select an individual or firm to provide him with financial and tax
planning services with respect to such payments, and the Company shall reimburse
the Executive for the reasonable costs of such services.

            5.    CHANGE IN CONTROL.

            (a) No benefit shall be payable under this Section 5 unless there
shall have been a Change in Control of the Bank or Company, as set forth below.
For purposes of this Agreement, a "Change in Control" of the Bank or Company
shall mean an event of a nature that: (i) would be required to be reported in
response to Item l(a) of the current report on Form 8-K, as in effect on the
date hereof, pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934, as amended (the "Exchange Act"); (ii) results in a Change in Control of
the Bank or the Company within the meaning of the Change in Bank Control Act and
the Rules and Regulations promulgated by the Federal Deposit Insurance
Corporation (the "FDIC") at 12 C.F.R. Section 303.4(a) with respect to the Bank
and the Board of Governors of the Federal Reserve System ("FRB") at 12 C.F.R.
Section 225.41(b) with respect to the Company, as in effect on the date hereof,
but excluding any such Change in Control resulting from the purchase of
securities by the Company's or the Bank's tax-qualified employee benefit plans
and trusts; (iii) results in a transaction requiring prior FRB approval under
the Bank Holding Company Act of 1956, as amended, and the regulations
promulgated thereunder by the FRB at 12 C.F.R. Section 225.11, as in effect on
the date hereof, except for the Company's acquisition of the Bank and any
transaction resulting from the purchase of securities by the Company's or the
Bank's tax-qualified employee benefit plans and trusts; or (iv) without
limitation such a Change in Control shall be deemed to have occurred at such
time as (A) 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 Bank or
the Company representing 20% or more of the Bank's or the Company's outstanding
securities except for any securities of the Bank purchased by the Company in
connection with the initial conversion of the Bank from mutual to stock form
(the "Conversion") and any securities purchased by the Company's or the Bank's
tax-qualified employee benefit plans and trusts; or (B) individuals who
constitute the Board on the date hereof (the "Incumbent Board") cease for any
reason to constitute at least a majority of the Board, provided, however, that
any person becoming a director subsequent to the date hereof whose election or
nomination for election by the Company's stockholders, was approved by a vote of
at least three-quarters of the directors then comprising the Incumbent Board
shall be considered as though he were a member of the Incumbent Board, but
excluding, for this purpose, any such person

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whose initial assumption of office occurs as a result of an actual or threatened
election contest with respect to the election or removal of directors or other
actual or threatened solicitation of proxies or consents by or on behalf of a
person other than the Board; or (C) a plan of reorganization, merger,
consolidation, sale of all or substantially all the assets of the Bank or the
Company or similar transaction occurs in which the Bank or Company is not the
resulting entity; or (D) a proxy statement shall be distributed soliciting
proxies from stockholders of the Company, by someone other than the current
management of the Company, seeking stockholder approval of a plan of
reorganization, merger or consolidation of the Company or Bank or similar
transaction with one or more corporations as a result of which the outstanding
shares of the class of securities then subject to such plan or transaction are
exchanged for or converted into cash or property or securities not issued by the
Bank or the Company; or (E) a tender offer is made for 20% or more of the voting
securities of the Bank or Company then outstanding. The "Change in Control Date"
shall mean the date during the Employment Period on which a Change in Control
occurs. Anything in this Agreement to the contrary notwithstanding, if the
Executive's employment with the Company is terminated and if it is reasonably
demonstrated by the Executive that such termination of employment (1) was at the
request of a third party who has taken steps reasonably calculated to effect a
Change in Control or (2) otherwise arose in connection with or anticipation of a
Change in Control, then for all purposes of this Agreement the "Change in
Control Date" shall mean the date immediately prior to the date of such
termination of employment.

            (b) If any of the events described in Section 5(a) constituting a
Change in Control have occurred or the Board has determined that a Change in
Control has occurred, Executive shall be entitled to the payments and the
benefits provided below on the Change in Control Date. The amounts payable and
the benefits to be provided under this Section 5(b) to Executive shall consist
of the payments and benefits that would be due to the Executive and the
Executive's family under Section 4 as if an Event of Termination under Section
4(a) had occurred on the Change in Control Date and that for purposes of this
Section 5(b), the term "unexpired Employment Period" shall mean three years from
the Change in Control Date (even if such three-year period extends beyond the
Executive's 65th birthday). The benefits to be provided under, and the amounts
payable pursuant to, this Section 5 shall be provided and be payable without
regard to proof of damages and without regard to the Executive's efforts, if
any, to mitigate damages. The Company and Executive hereby stipulate that the
damages which may be incurred by Executive following any Change in Control are
not capable of accurate measurement as of the date first above written and that
such liquidated damages constitute reasonable damages under the circumstances.

            (c) Payments to Executive under Section 5(b) shall be made on the
Change in Control Date.

            6.    TERMINATION FOR DISABILITY.

            (a) In the event of Termination for Disability, Executive shall
receive the benefits provided in Section 6(b); provided, however, that the
benefits provided under Section 6(b) shall not be deemed to be in lieu of the
benefits he is otherwise entitled as a former employee under the Bank or
Company's employee plans and programs. For purposes of this Agreement, Executive
may be terminated for disability only if (i) Executive shall have been absent
from his duties with the Company on a full-time basis for six (6) consecutive
months, or (ii) a majority of the members of the Board acting in good faith
determine that, based upon competent and independent medical evidence presented
by a physician or physicians agreed upon by the parties, Executive's physical or
mental condition is such that he is totally and permanently incapable of
engaging in any substantial gainful employment based upon his education,
training and experience; provided, however, that on and after the earliest date
on which a Change in Control of the Bank or Company as defined in Section 5
occurs, such a determination shall require the affirmative vote of at least
three-fourths of the members of the Board acting in good faith and such vote

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shall not be made prior to the expiration of a sixty-day period following the
date on which the Board shall, by written notice to the Executive, furnish him a
statement of its grounds for proposing to make such determination, during which
period Executive shall be afforded a reasonable opportunity to make oral and
written presentations to the members of the Board, and to be represented by his
legal counsel at such presentations, to refute the grounds for the proposed
determination;

            (b) The Company will cause to be continued insurance coverage,
including life, health, dental, prescription drug and disability coverage
substantially identical to the coverage maintained by the Bank or the Company
for Executive prior to his Termination for Disability. This coverage shall cease
upon the earlier of (i) the date Executive returns to the full-time employment
of the Company, in the same capacity as he was employed prior to his Termination
for Disability and pursuant to an employment agreement between Executive and the
Company; (ii) Executive's full-time employment by another employer; (iii)
Executive's attaining the normal age of retirement or receiving benefits under
the Bank's or the Company's defined benefit plan; (iv) the Executive's death;
(v) the Executive's eligibility to collect payments under the disability
provision of the defined benefit plan; or (vi) the expiration of the term of
this Agreement.

            (c) Notwithstanding the foregoing, there will be no reduction in the
compensation otherwise payable to Executive during any period during which
Executive is incapable of performing his duties hereunder by reason of temporary
disability.

            6A.   TERMINATION UPON DEATH.

            The Executive's employment shall terminate automatically upon the
Executive's death during the Employment Period. In such event, the Executive and
the Executive's legal representatives shall be entitled to the following:

             (i) payment of the sum of (1) the Executive's annual Base Salary
      through the Date of Termination to the extent not theretofore paid and (2)
      any compensation previously deferred by the Executive (together with any
      accrued interest or earnings thereon) and any accrued vacation pay, in
      each case to the extent not theretofore paid (the sum of the amounts
      described in clauses (1) and (2) shall be hereinafter referred to as the
      "Accrued Obligations"),

            (ii) the continuation of all benefits to the Executive's family and
      dependent that would have been provided if the Executive had been entitled
      to the benefits under Section 4(b)(ii), (iii) and (iv), and

            (iii) the timely payment of any other amounts or benefits required
      to be paid or provided or which the Executive is eligible to receive under
      any plan, program, policy or practice or contract or agreement of the
      Company and its affiliated companies (all such other amounts and benefits
      shall be hereinafter referred to as the "Other Benefits");

provided, however, that if the Executive dies while in the employment of the
Company, the amount of life insurance provided to the Executive by the Company
shall not be less than the lesser of $400,000 or three times the Executive's
then annual Base Salary. Accrued Obligations shall be paid to the Executive's
estate or beneficiary, as applicable, in a lump sum in cash within ten days of
the Date of Termination. With respect to the provision of Other Benefits after
the Change of Control Date, the term Other Benefits as utilized in this Section
6A shall include, without limitation, and the Executive's estate and/or
beneficiaries shall be entitled to receive, benefits at least equal to the most
favorable benefits provided by the Company and affiliated companies to the
estates and beneficiaries of peer executives of the

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<PAGE>   10
Company and such affiliates companies under such plans, programs, practices and
policies relating to death benefits, if any, as in effect with respect to other
peer executives and their beneficiaries at any time during the 120-day period
immediately preceding the Change in Control Date.

            7.    TERMINATION UPON RETIREMENT.

            Termination by the Company of the Executive based on "Retirement"
shall mean termination in accordance with the Company's retirement policy or in
accordance with any retirement arrangement established with Executive's consent
with respect to him. Upon termination of Executive upon Retirement, Executive
shall be entitled to all benefits under any retirement plan of the Bank or the
Company and other plans to which Executive is a party, and shall be entitled to
the benefit, if any, as a former employee under the Bank's or the Company's
employee benefit plans and programs and compensation plans and programs.

            8.    TERMINATION FOR CAUSE.

            The terms "Termination for Cause" or "Cause" shall mean termination
because of the Executive's personal dishonesty, willful misconduct, any breach
of fiduciary duty involving personal profit, intentional failure to perform
stated duties, conviction of a felony with respect to the Bank or the Company or
any material breach of this Agreement. For purposes of this Section, no act, or
the failure to act, on Executive's part shall be "willful" unless done, or
omitted to be done, in bad faith and without reasonable belief that the action
or omission was in the best interest of the Company or its affiliates. Any act,
or failure to act, based upon authority given pursuant to a resolution duly
adopted by the Board or based upon the written advice of counsel for the Company
shall be conclusively presumed to be done, or omitted to be done, by the
Executive in good faith and in the best interests of the Company.
Notwithstanding the foregoing, Executive shall not be deemed to have been
terminated for Cause unless and until there shall have been delivered to him a
Notice of Termination which shall include a copy of a resolution duly adopted by
the affirmative vote of not less than three-fourths of the members of the Board
at a meeting of the Board called and held for that purpose (after reasonable
notice to Executive and an opportunity for him, together with counsel, to be
heard before the Board), finding that in the good faith opinion of the Board,
Executive was guilty of conduct justifying termination for Cause and specifying
the particulars thereof in detail. The Executive shall not have the right to
receive compensation or other benefits for any period after Termination for
Cause.

            9.    NOTICE.

            (a) Any purported termination by the Company or by Executive shall
be communicated by Notice of Termination to the other party hereto. For purposes
of this Agreement, a "Notice of Termination" shall mean a written notice which
shall indicate the specific termination provision in this Agreement relied upon
and shall set forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination of Executive's employment under the provision so
indicated.

            (b) Subject to Section 9(c), "Date of Termination" shall mean (A) if
Executive's employment is terminated for Disability, thirty days after a Notice
of Termination is given (provided that he shall not have returned to the
performance of his duties on a full-time basis during such thirty (30) day
period), and (B) if his employment is terminated for any other reason, the date
specified in the Notice of Termination (which, in the case of a Termination for
Cause, shall be immediate).

            (c) If, within thirty days after any Notice of Termination is given,
the party receiving such Notice of Termination notifies the other party that a
dispute exists concerning the termination, except upon the occurrence of a
Change in Control and voluntary termination by the Executive in which case

                                       -9-
<PAGE>   11
the Date of Termination shall be the date specified in the Notice, the Date of
Termination shall be the date on which the dispute is finally determined, either
by mutual written agreement of the parties, by a binding arbitration award, or
by a final judgment, order or decree of a court of competent jurisdiction (the
time for appeal there from having expired and no appeal having been perfected)
and provided further that the Date of Termination shall be extended by a notice
of dispute only if such notice is given in good faith and the party giving such
notice pursues the resolution of such dispute with reasonable diligence.
Notwithstanding the pendency of any such dispute, the Company will continue to
pay Executive his full compensation in effect when the notice giving rise to the
dispute was given (including, but not limited to, Base Salary) and continue him
as a participant in all compensation, benefit and insurance plans in which he
was participating when the notice of dispute was given, until the dispute is
finally resolved in accordance with this Agreement. Amounts paid under this
Section are in addition to all other amounts due under this Agreement and shall
not be offset against or reduce any other amounts due under this Agreement.

            (d) The Company may terminate the Executive's employment at any
time, but any termination by the Company, other than Termination for Cause,
shall not prejudice Executive's right to compensation or other benefits under
this Agreement or under any other benefit or compensation plans or programs
maintained by the Bank or the Company from time to time. Executive shall not
have the right to receive compensation or other benefits for any period after
Termination for Cause as defined in Section 8 hereinabove.

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

            If to Executive:

            Ira H. Kramer
            12 Hollywood Drive
            Plainview, New York  11803

            If to the Board:

            T R Financial Corp.
            1122 Franklin Avenue
            Garden City, New York 11530
            Attention:  Corporate Secretary

            10.   POST-TERMINATION OBLIGATIONS.

            (a) All payments and benefits to Executive under this Agreement
shall be subject to Executive's compliance with paragraph (b) of this Section 10
during the term of this Agreement and for one full year after the expiration or
termination hereof.

            (b) Executive shall, upon reasonable notice, furnish such
information and assistance to the Company as may reasonably be required by the
Company in connection with any litigation in which it or any of its subsidiaries
or affiliates is, or may become, a party.

                                      -10-
<PAGE>   12
            11.   COVENANT NOT TO COMPETE.

            Executive hereby covenants and agrees that for a period of one year
following his Date of Termination, if such termination occurs prior to the end
of the term of the Agreement, he shall not, without the written consent of the
Board, become an officer, employee, consultant, director or trustee of any
savings bank, savings and loan association, savings and loan holding company,
bank or bank holding company if such position (a) entails working in (or
providing services in) New York City, Nassau, Suffolk or Westchester counties or
(b) entails working in (or providing services in) any county in northern New
Jersey or southern Connecticut that is both (i) within the Bank's primary trade
(or operating) area at the time in question, which shall be determined by
reference to the Bank's business plan as in effect from time to time, and (ii)
in material or substantial deposit-taking functions or lending activities at
such time; provided, however, that this Section 11 shall not apply if
Executive's employment is terminated for the reasons set forth in Section 4, 5,
6, or 7.

            12.   SOURCE OF PAYMENTS.

            All payments provided in this Agreement shall be timely paid in cash
or check from the general funds of the Company.

            13.   EFFECT ON PRIOR AGREEMENTS.

            This Agreement contains the entire understanding between the parties
hereto and supersedes any prior employment agreement between the Company or any
predecessor of the Company and Executive including the Employment Agreement
dated June 29, 1993 and the amended and restated Employment Agreement dated
October 13, 1995, except that this Agreement shall not affect or operate to
reduce any benefit or compensation inuring to the Executive of a kind elsewhere
provided. No provisions of this Agreement shall be interpreted to mean that
Executive is subject to receiving fewer benefits than those available to him
without reference to this Agreement.

            14.   EFFECT OF ACTION UNDER BANK AGREEMENT.

            Notwithstanding any provision herein to the contrary, to the extent
that full compensation payments and benefits are paid to or received by
Executive under the Employment Agreement, dated January 23, 1997, as it may be
amended from time to time, between Executive and the Bank, such compensation
payments and benefits paid by the Bank will be deemed to satisfy the
corresponding obligations of the Company under this Agreement.

            15.   NO ATTACHMENT.

            Except as required by law, no right to receive payments under this
Agreement shall be subject to anticipation, commutation, alienation, sale,
assignment, encumbrance, charge, pledge, or hypothecation, or to execution,
attachment, levy, or similar process or assignment by operation of law, and any
attempt, voluntary or involuntary, to affect any such action shall be null,
void, and of no effect.

            16.   MODIFICATION AND WAIVER.

            (a) This Agreement may not be modified or amended except by an
instrument in writing signed by the parties hereto.

            (b) No term or condition of this Agreement shall be deemed to have
been waived, nor shall there be any estoppel against the enforcement of any
provision of this Agreement, except by

                                      -11-
<PAGE>   13
written instrument of the party charged with such waiver or estoppel. No such
written waiver shall be deemed a continuing waiver unless specifically stated
therein, and each such waiver shall operate only as to the specific term or
condition waived and shall not constitute a waiver of such term or condition for
the future as to any act other than that specifically waived.

            17.   SUCCESSOR AND ASSIGNS.

            This Agreement will inure to the benefit of and be binding upon
Executive, his legal representatives and testate or intestate distributees, and
the Company, its successors and assigns, including any successor by purchase,
merger, consolidation or otherwise or a statutory receiver or any other person
or firm or corporation to which all or substantially all of the assets and
business of the Company may be sold or otherwise transferred. Any such successor
of the Company shall be deemed to have assumed this Agreement and to have become
obligated hereunder to the same extent as the Company, and Executive's
obligations hereunder shall continue in favor of such successor.

            18.   SEVERABILITY.

            If, for any reason, any provision of this Agreement, or any part of
any provision, is held invalid, such invalidity shall not affect any other
provision of this Agreement or any part of such provision not held so invalid,
and each such other provision and part thereof shall to the full extent
consistent with law continue in full force and effect.

            19.   HEADINGS FOR REFERENCE ONLY.

            The headings of sections and paragraphs herein are included solely
for convenience of reference and shall not control the meaning or interpretation
of any of the provisions of this Agreement. Any reference in this Agreement to a
Section or Subsection shall refer to a Section or Subsection of this Agreement,
except as otherwise specified.

            20.   GOVERNING LAW.

            This Agreement shall be governed by the laws of the State of New
York, without reference to conflicts of law principles.

            21.   ARBITRATION.

            Any dispute or controversy arising under or in connection with this
Agreement shall be settled exclusively by arbitration, conducted before a panel
of three arbitrators sitting in a location selected by the Executive within
fifty miles from the location of the Company, in accordance with the commercial
arbitration rules of the American Arbitration Association then in effect.
Judgment may be-entered on the arbitrators' award in any court having
jurisdiction; provided, however, that Executive shall be entitled to seek
specific performance of his right to be paid until the Date of Termination
during the pendency of any dispute or controversy arising under or in connection
with this Agreement.

            22.   INDEMNIFICATION AND ATTORNEYS' FEES.

            (a) The Company shall indemnify, hold harmless and defend Executive
against reasonable costs, including legal fees, incurred by him in connection
with his consultation with legal counsel or arising out of any action, suit or
proceeding in which he may be involved, as a result of his efforts, in good
faith, to defend or enforce the terms of this Agreement. The Company agrees to
pay all such costs as they are incurred by Executive, to the full extent
permitted by law, and without regard to

                                      -12-
<PAGE>   14
whether the Company believes that it has a defense to any action, suit or
proceeding by the Executive or that it is not obligated for any payments under
this Agreement.

            (b) In the event any dispute or controversy arising under or in
connection with Executive's termination is resolved in favor of the Executive,
whether by judgment, arbitration or settlement, Executive shall be entitled to
the payment of all back-pay, including salary, bonuses and any other cash
compensation, fringe benefits and any compensation and benefits due Executive
under this Agreement.

            (c) The Company shall indemnify, hold harmless and defend Executive
for any act taken or not taken, or any omission or failure to act, by him in
good faith while performing services for the Company or the Bank to the same
extent and upon the same terms and conditions as other similarly situated
officers and directors of the Company or the Bank. If and to the extent that the
Company or the Bank, maintains, at any time during the Employment Period, an
insurance policy covering the other officers and directors of the Company or the
Bank against laws suits, the Company or the Bank shall use its best efforts to
cause Executive to be covered under such policy upon the same terms and
conditions as other similarly situated officers and directors.

            23.   TAX INDEMNIFICATION.

            (a) This Section 23 shall apply if at the relevant date and during
the six-month period ending on the relevant date, the Bank was in compliance
with all applicable minimum capital requirements imposed upon the Bank by
federal or state regulatory authorities, taking into account any phase-in
period, grandfather rights or similar provisions that are applicable to the
Bank. For purposes of the preceding sentence, the term "relevant date" shall
mean the day before the date on which the change "in the ownership or effective
control" of the Company or "in the ownership of a substantial portion of the
assets" of the Company occurs within the meaning of Section 280G of the Code. If
this Section 23 applies, then if, for any taxable year, the Executive shall be
liable for the payment of an excise tax under Section 4999 of the Code, with
respect to any payment in the nature of compensation made by the Company, the
Bank or any direct or indirect subsidiary or affiliate of the Company to (or for
the benefit of) the Executive, the Company shall pay to the Executive an amount
equal to X determined under the following formula:

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


            where

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

            P    = the amount with respect to which such excise tax is
                   assessed, determined without regard to this Section 23;

            FI   = the highest effective marginal rate of income tax
                   applicable to the Executive under the Code for the taxable
                   year in question (taking into account any phase-out or loss
                   of deductions, personal exemptions and other similar
                   adjustments);

            SLI  = the sum of the highest effective marginal rates of income
                   tax applicable to the Executive under all applicable state
                   and local laws for the taxable year in question (taking into
                   account any phase-out or loss of deductions, personal
                   exemptions and other similar adjustments); and

                                      -13-
<PAGE>   15
            M    = the highest marginal rate of Medicare tax applicable to the
                   Executive under the Code for the taxable year in question.

Any payment under this Section 23 shall be adjusted so as to fully indemnify the
Executive on an after-tax basis so that the Executive would be in the same
after-tax financial position in which he would have been if no excise tax under
Section 4999 of the Code had been imposed. With respect to any payment in the
nature of compensation that is made to (or for the benefit of) the Executive
under the terms of this Agreement or otherwise and on which an excise tax under
Section 4999 of the Code will be assessed, the payment determined under this
Section 23(a) shall be made to the Executive on the earlier of (i) the date the
Company, the Bank or any direct or indirect subsidiary or affiliate of the
Company is required to withhold such tax, or (ii) the date the tax is required
to be paid by the Executive.

            (b) Notwithstanding anything in this Section 23 to the contrary, in
the event that the Executive's liability for the excise tax under Section 4999
of the Code for a taxable year is subsequently determined to be different than
the amount determined by the formula (X + P) x E, where X, P and E have the
meanings provided in Section 23(a), the Executive or the Company, as the case
may be, shall pay to the other party at the time that the amount of such excise
tax is finally determined, an appropriate amount, plus interest, such that the
payment made under Section 23(a), when increased by the amount of the payment
made to the Executive under this Section 23(b) by the Company, or when reduced
by the amount of the payment made to the Company under this Section 23(b) by the
Executive, equals the amount that, it is finally determined, should have
properly been paid to the Executive under Section 23(a). The interest paid under
this Section 23(b) shall be determined at the rate provided under Section
1274(b)(2)(B) of the Code. To confirm that the proper amount, if any, was paid
to the Executive under this Section 23, the Executive shall furnish to the
Company a copy of each tax return which reflects a liability for an excise tax
payment made by the Company, at least twenty days before the date on which such
return is required to be filed with the Internal Revenue Service.

            24.   NON-EXCLUSIVITY OF RIGHTS.

            Except as otherwise provided herein, nothing in this Agreement shall
prevent or limit the Executive's continuing or future participation in any plan,
program, policy or practice provided by the Company or any of its affiliated
companies and for which the Executive may qualify, nor shall anything herein
limit or otherwise affect such rights as the Executive may have under any
contract or agreement with the Company or any of its affiliated companies.
Amounts which are vested benefits or which the Executive is otherwise entitled
to receive under any plan, policy, practice or program of or any contract or
agreement with the Company or any of its affiliated companies at or subsequent
to the Date of Termination shall be payable in accordance with such plan,
policy, practice or program or contract or agreement except as explicitly
modified by this Agreement. Notwithstanding the foregoing, in the event of a
termination of employment, the amounts provided in Section 4 shall be the
Executive's sole remedy for any purported breach of this Agreement by the
Company.

            25.   MITIGATION; OTHER CLAIMS.

            The Company's obligation to make the payments provided for in this
Agreement and otherwise to perform its obligations hereunder shall not be
affected by any set-off, counterclaim, recoupment, defense or other claim, right
or action which the Company may have against the Executive or others. In no
event shall the Executive be obligated to seek other employment or take any
other action by way of mitigation of the amounts payable to the Executive under
any of the provisions of this Agreement and such amounts shall not be reduced
whether or not the Executive obtains other employment.

                                      -14-
<PAGE>   16
            26.   CONFIDENTIAL INFORMATION.

            The Executive shall hold in a fiduciary capacity for the benefit of
the Company all secret or confidential information, knowledge or data relating
to the Company or any of its affiliated companies, and their respective
businesses, which shall have been obtained by the Executive during the
Executive's employment by the Company or any of its affiliated companies and
which shall not be or become public knowledge (other than by acts by the
Executive or representatives of the Executive in violation of this Agreement).
After termination of the Executive's employment with the Company, the Executive
shall not, without the prior written consent of the Company or as may otherwise
be required by law or legal process, communicate or divulge any such
information, knowledge or data to anyone other than the Company and those
designated by it. For purposes of this Agreement, secret and confidential
information, knowledge or data relating to the Company or any of its affiliates,
and their respective business, shall not include any information that is public,
publicly available or available through trade association sources.

            27.   ACCESS TO DOCUMENTS.

            The Executive shall have the right to obtain copies of any Company
or Bank documents that Executive reasonably believes, in good faith, are
necessary or appropriate in determining his entitlement to, and the amount of,
payments and benefits under this Agreement.


                                   SIGNATURES

            IN WITNESS WHEREOF, T R Financial Corp. has caused this Agreement to
be executed and its seal to be affixed hereunto by its duly authorized
directors, and Executive has signed this Agreement, on the 23rd day of January,
1997.

ATTEST:                             T R FINANCIAL CORP.


/s/ Dennis E. Henchy                By:   /s/ John M. Tsimbinos
-------------------------------         ---------------------------------------
Dennis E. Henchy                          John M. Tsimbinos
Executive Vice President,                 Duly Authorized Director
    Chief Financial Officer

/s/ Dennis E. Henchy                By:   /s/ A. Gordon Nutt
-------------------------------         ---------------------------------------
Dennis E. Henchy                          A. Gordon Nutt
Executive Vice President,                 Duly Authorized Director
    Chief Financial Officer


[SEAL]


WITNESS:


/s/ A. Gordon Nutt                  /s/ Ira H. Kramer
-------------------------------     -------------------------------------------
                                    IRA H. KRAMER

                                      -15-
<PAGE>   17
STATE OF NEW YORK )
                  : ss.:
COUNTY OF NASSAU  )

            On this 23rd day of January, 1997, before me personally came John M.
Tsimbinos, to me known, who, being by me duly sworn, did depose and say that he
resides at 238 Clent Road, Great Neck, New York, that he is a member of the
Board of Directors of T R Financial Corp., the Delaware corporation described in
and which executed the foregoing instrument; that he knows the seal of said
corporation; that the seal affixed to said instrument is such seal; that it was
so affixed by order of the Board of Directors of said corporation; and that he
signed his name thereto by like order.


                                            /s/ Eleanor I. Feuring
                                            -----------------------------------
                                                      Eleanor I. Feuring
                                                      Notary Public
STATE OF NEW YORK )
                  : ss.:
COUNTY OF NASSAU  )

            On this 23rd day of January, 1997, before me personally came A.
Gordon Nutt, to me known, who, being by me duly sworn, did depose and say that
he resides at 634 Wyndemere Avenue, Ridgewood, New Jersey, that he is a member
of the Board of Directors of T R Financial Corp., the Delaware corporation
described in and which executed the foregoing instrument; that he knows the seal
of said corporation; that the seal affixed to said instrument is such seal; that
it was so affixed by order of the Board of Directors of said corporation; and
that he signed his name thereto by like order.


                                            /s/ Eleanor I. Feuring
                                            -----------------------------------
                                                      Eleanor I. Feuring
                                                      Notary Public
STATE OF NEW YORK )
                  : ss.:
COUNTY OF NASSAU  )

            On this 23rd day of January, 1997, before me personally came Ira H.
Kramer, to me known, and known to me to be the individual described in the
foregoing instrument, who, being by me duly sworn, did depose and say that he
resides at the address set forth in said instrument, and that he signed his name
to the foregoing instrument.


                                            /s/ Eleanor I. Feuring
                                            -----------------------------------
                                                      Eleanor I. Feuring
                                                      Notary Public

                                      -16-