content: UNITED STATES
                         SECURITIES AND EXCHANGE COMMISSION
                               Washington, D.C. 20549
  
                          ---------------------------------
                                      FORM 8-K
                          ---------------------------------
  
                                   CURRENT REPORT
       Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
  
                                   March 1, 2007
                  Date of report (Date of earliest event reported)
  
                                      TSR, INC.
               (Exact Name of Registrant as Specified in its charter)
  
      Delaware                 0-8656                  13-2635899
  -----------------         -------------           -------------------
  (State or Other           (Commission              (I.R.S. Employer
     Jurisdiction            File Number)           Identification No.)
   of Incorporation)
  
  
                        400 Oser Avenue, Hauppauge, NY         11788
   -----------------------------------------------------------------------------
                 (Address of Principal Executive Offices)    (Zip Code)
  
                                   (631) 231-0333
   -----------------------------------------------------------------------------
                (Registrant's Telephone Number, Including Area Code)
  
   -----------------------------------------------------------------------------
           (Former Name or Former Address, If Changed Since Last Report)
  
  Check the appropriate box below if the Form 8-K filing is intended to
  simultaneously satisfy the filing obligation of the registrant under any of the
  following provisions.
  
  [  ]    Written communication pursuant to Rule 425 under the
          Securities Act (17 CFR 230.425)
  
  [  ]    Soliciting material pursuant to Rule 14a-12 under the
          Exchange Act (17 CFR 240.14a-12)
  
  [  ]    Pre-commencement communications pursuant to Rule 14d-2(b)
          under the Exchange Act (17 CFR 240.14d-2(b))
  
  [  ]    Pre-commencement communications pursuant to rule 13e-4(c) under the
          Exchange Act (17 CFR 240.13e-4(c))
  
                                         1
  <PAGE>
  
  
  Item 1.01 Entry into a Material Definitive Agreement.
  
       TSR, Inc. (the "Company") entered into an employment  agreement dated March
  1, 2007 with Christopher  Hughes, who has recently been elected as a Senior Vice
  President of the Company and President of the Company's TSR Consulting Services,
  Inc. subsidiary.  The employment agreement is for a term of five years, provides
  for an annual base salary of  $200,000,  and for an annual  discretionary  bonus
  based on standards to be approved annually by the Compensation  Committee of the
  Board of  Directors  of the  Company.  The  employment  agreement  provides  for
  severance,  in the event of termination  without cause, equal to the base salary
  for two  years.  The  employment  agreement  also  contains  a change in control
  agreement pursuant to which Mr. Hughes will receive a payment equal to two times
  his base  salary and then  current  bonus if his  employment  is  terminated  in
  connection with or following a change of control.
  
  Item 9.01  Financial Statements and Exhibits.
  
  (d)  Exhibits:
  
  Exhibit Number    Description
  --------------    -----------------------
  10.1              Employment Agreement dated March 1, 2007 between the Company
                    and Christopher Hughes
  
                                         2
  <PAGE>
  
  
  SIGNATURES
       Pursuant to the  requirements  of the Securities  Exchange Act of 1934, the
  Registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
  undersigned hereunto duly authorized.
  
                                          TSR, INC.
  
                                          By:     /s/ John G. Sharkey
                                                  --------------------
                                          Name:   John G. Sharkey
                                          Title:  Vice President and Secretary
  
  Date:    March 6, 2007
  
  
                                         3
  <PAGE>
  
                                                                      Exhibit 10.1
  
                                EMPLOYMENT AGREEMENT
  
      AGREEMENT effective this 1st day of March, 2007 by and between TSR, Inc., a
  Delaware corporation,  with offices at 400 Oser Avenue, Hauppauge, New York
  11788 (hereinafter called the "Corporation") and Christopher Hughes, residing at
  xxxxx New York (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 TSR Consulting
  Services,  Inc.  and Senior  Vice  President  of the  Corporation  or such other
  position  as he  may be  appointed  to by  the  Board  of  Directors,  with  the
  Corporation  or any  subsidiary  thereof to perform such duties on behalf of the
  Corporation and TSR Consulting  Services,  Inc. as the Chairman 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 Chairman of
  the  Board  of  Directors  of the  Corporation  and the  Corporation's  Board of
  Directors.  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  to which he is elected,  including
  without limitation as a director of the Corporation.
  
  3.  Executive shall be employed for a term of five (5) years commencing as of
  the 1st day of  March, 2007 and ending on the 28th day of February, 2012 (the
  "Term"), unless his employment is terminated prior to the expiration of the Term
  pursuant to the provisions hereof.
  
  4.  (a)   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  Corporation's  Compensation  Committee of the Board of
            Directors,  shall in good  faith,  after the end of each  fiscal  year
            consider   and  cause  the   Corporation   to  grant  to  Executive  a
            discretionary  bonus,  based upon standards  which the Chairman of the
            Corporation, subject to the approval of the Corporation's Compensation
            Committee of the Board of Directors, shall establish with Executive at
            the  beginning  of the each fiscal year  commencing  after the date of
            this Agreement and for the period from the date of the Agreement until
            May 31, 2007 and which  standards may be modified  thereafter with the
            approval  of  the  Compensation  Committee.  The  bonus  provided  for
            hereunder shall be payable by the Corporation to Executive  within 120
            days of the end of the fiscal year, for the period to which such bonus
  
  
                                         4
  <PAGE>
  
            relates.  The Company shall pay to the Employee as an advance  payment
            of the bonus  within 30 days after the end of each  fiscal  quarter an
            amount equal to the bonus which would have been earned through the end
            of  such  fiscal  quarter,  based  on the  standards  approved  by the
            Compensation  Committee.  Each such advance payment of the bonus shall
            be  approved  by the  Compensation  Committee  unless  it is  paid  in
            accordance with a formula approved in advance for such fiscal year. In
            the event that following any fiscal quarter or following completion of
            the Company's audited financial statements, any advance payment of the
            bonus  previously  paid with  respect to any fiscal  year (or  portion
            thereof)  exceeds the amount that Executive is entitled to through the
            end of such fiscal  quarter or fiscals year,  Employee  shall promptly
            return such excess.
  
       (b)  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 is entitled to executive medical
            benefits  and also shall be entitled to a car (leased or owned at sole
            discretion of the Corporation) in such amounts for the car as shall be
            determined by the Board of Directors of the Corporation. Any or all of
            such entitlements in the preceding sentence 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
  in connection with 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 indicted of
            a felony, (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  or any policy  established  by the  Corporation's  Board of
            Directors  and fail to  correct  such  breach  within  ten days  after
            written notice of commission thereof.
  
      (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
  
                                         5
  <PAGE>
  
            (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)   The  Corporation   may  terminate  this  Agreement  and   Executive's
            employment  hereunder  for any  reason  other than as  provided  under
            Section 6(a),  (b), or (c),  upon thirty (30) days' written  notice to
            Executive and, in such event,  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 two (2)
            year's salary at the Base Salary,  payable in  forty-eight  (48) equal
            semi-monthly installments.
  
            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 eighteen  (18) months after  termination  to
            participate in the health benefit program provided to all employees of
            the  Corporation  which may then be in effect.  The cost of  providing
            such  coverage  under  health  benefit  program  will  be  paid by the
            Corporation.
  
  7. In the event that during the Term the  Executive's  employment  is terminated
  without Cause in  anticipation of or within one year after a "Change in Control"
  (as defined below):
  
       (a)  (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:
  
            (A)  his full  salary  at the Base  Salary  in  effect  at the date of
                 termination for two years.
  
            (B)  two (2) times his bonus for the then current  fiscal year,  or if
                 that  amount can not be  determined,  two (2) times the amount of
                 the bonus paid in the prior fiscal year.
  
                                         6
  <PAGE>
  
            (C)  the Company will  continue to provide all benefits  enumerated in
                 Paragraph  4 of this  Agreement  for a maximum of  eighteen  (18)
                 months.
  
      (b)    As used herein, the term "Change in Control" shall mean:
  
            (i) any "person" or "group" (as such terms are used in Sections  13(d)
            and 14(d) of the Securities Exchange Act of 1934 (the "Exchange Act"),
            which is not  currently a person who  controls  (within the meaning of
            Rule 12b-2 promulgated  under the Exchange Act),  individually or as a
            member of a group,  the Company is or becomes the  "beneficial  owner"
            (as  defined  in Rule  13d-3  promulgated  under  the  Exchange  Act),
            directly or indirectly,  of securities of the Corporation representing
            50.1% or more of the combined voting power of the  Corporation's  then
            outstanding  securities.
  
            (ii) 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
  
            (iii) 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.
  
  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
  
  
                                         7
  <PAGE>
  
  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:
  
          If to the Corporation at:
  
                  Chairman of the Board
                  TSR, Inc.
                  400 Oser Avenue
                  Hauppauge, New York 11788
  
          With a copy to:
  
                  Mr. John Sharkey
                  Vice President of Finance
                  TSR, Inc.
                  400 Oser Avenue
                  Hauppauge, New York 11788
  
          If to the Executive at:
  
                  Mr. Christopher Hughes
                  xxxxxxx
                  xxxxx, New York
  
       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.
  
                                         8
  <PAGE>
  
  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.
  
  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/ Christopher Hughes
  ----------------------
  Christopher Hughes
  Executive
  
  TSR, Inc.
  
  By:    /s/ Joseph F. Hughes
         ----------------------
  Name:  Joseph F. Hughes
  Title: Chairman
metadata_documents: [{"type": "8-K", "sequence": "1", "filename": "e7481086v3.txt", "secsgml_size_bytes": 22983}]
metadata_filer: {"company-data": {"conformed-name": "TSR INC", "cik": "0000098338", "assigned-sic": "7371", "irs-number": "132635899", "state-of-incorporation": "DE", "fiscal-year-end": "0531"}, "filing-values": {"form-type": "8-K", "act": "34", "file-number": "000-08656", "film-number": "07674530"}, "business-address": {"street1": "400 OSER AVE", "city": "HAUPPAUGE", "state": "NY", "zip": "11788", "phone": "5162310333"}, "mail-address": {"street1": "400 OSER AVENUE", "city": "HAUPPAUGE", "state": "NY", "zip": "11788"}, "former-company": {"former-conformed-name": "TIME SHARING RESOURCES INC", "date-changed": "19840129"}}
text: UNITED STATES
                         SECURITIES AND EXCHANGE COMMISSION
                               Washington, D.C. 20549
  
                          ---------------------------------
                                      FORM 8-K
                          ---------------------------------
  
                                   CURRENT REPORT
       Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
  
                                   March 1, 2007
                  Date of report (Date of earliest event reported)
  
                                      TSR, INC.
               (Exact Name of Registrant as Specified in its charter)
  
      Delaware                 0-8656                  13-2635899
  -----------------         -------------           -------------------
  (State or Other           (Commission              (I.R.S. Employer
     Jurisdiction            File Number)           Identification No.)
   of Incorporation)
  
                        400 Oser Avenue, Hauppauge, NY         11788
   -----------------------------------------------------------------------------
                 (Address of Principal Executive Offices)    (Zip Code)
  
                                   (631) 231-0333
   -----------------------------------------------------------------------------
                (Registrant's Telephone Number, Including Area Code)
  
   -----------------------------------------------------------------------------
           (Former Name or Former Address, If Changed Since Last Report)
  
  Check the appropriate box below if the Form 8-K filing is intended to
  simultaneously satisfy the filing obligation of the registrant under any of the
  following provisions.
  
  [  ]    Written communication pursuant to Rule 425 under the
          Securities Act (17 CFR 230.425)
  
  [  ]    Soliciting material pursuant to Rule 14a-12 under the
          Exchange Act (17 CFR 240.14a-12)
  
  [  ]    Pre-commencement communications pursuant to Rule 14d-2(b)
          under the Exchange Act (17 CFR 240.14d-2(b))
  
  [  ]    Pre-commencement communications pursuant to rule 13e-4(c) under the
          Exchange Act (17 CFR 240.13e-4(c))
  
                                         1
  Item 1.01 Entry into a Material Definitive Agreement.
  
       TSR, Inc. (the "Company") entered into an employment  agreement dated March
  1, 2007 with Christopher  Hughes, who has recently been elected as a Senior Vice
  President of the Company and President of the Company's TSR Consulting Services,
  Inc. subsidiary.  The employment agreement is for a term of five years, provides
  for an annual base salary of  $200,000,  and for an annual  discretionary  bonus
  based on standards to be approved annually by the Compensation  Committee of the
  Board of  Directors  of the  Company.  The  employment  agreement  provides  for
  severance,  in the event of termination  without cause, equal to the base salary
  for two  years.  The  employment  agreement  also  contains  a change in control
  agreement pursuant to which Mr. Hughes will receive a payment equal to two times
  his base  salary and then  current  bonus if his  employment  is  terminated  in
  connection with or following a change of control.
  
  Item 9.01  Financial Statements and Exhibits.
  
  (d)  Exhibits:
  
  Exhibit Number    Description
  --------------    -----------------------
  10.1              Employment Agreement dated March 1, 2007 between the Company
                    and Christopher Hughes
  
                                         2
  SIGNATURES
       Pursuant to the  requirements  of the Securities  Exchange Act of 1934, the
  Registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
  undersigned hereunto duly authorized.
  
                                          TSR, INC.
  
                                          By:     /s/ John G. Sharkey
                                                  --------------------
                                          Name:   John G. Sharkey
                                          Title:  Vice President and Secretary
  
  Date:    March 6, 2007
  
                                         3
  Exhibit 10.1
  
                                EMPLOYMENT AGREEMENT
  
      AGREEMENT effective this 1st day of March, 2007 by and between TSR, Inc., a
  Delaware corporation,  with offices at 400 Oser Avenue, Hauppauge, New York
  11788 (hereinafter called the "Corporation") and Christopher Hughes, residing at
  xxxxx New York (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 TSR Consulting
  Services,  Inc.  and Senior  Vice  President  of the  Corporation  or such other
  position  as he  may be  appointed  to by  the  Board  of  Directors,  with  the
  Corporation  or any  subsidiary  thereof to perform such duties on behalf of the
  Corporation and TSR Consulting  Services,  Inc. as the Chairman 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 Chairman of
  the  Board  of  Directors  of the  Corporation  and the  Corporation's  Board of
  Directors.  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  to which he is elected,  including
  without limitation as a director of the Corporation.
  
  3.  Executive shall be employed for a term of five (5) years commencing as of
  the 1st day of  March, 2007 and ending on the 28th day of February, 2012 (the
  "Term"), unless his employment is terminated prior to the expiration of the Term
  pursuant to the provisions hereof.
  
  4.  (a)   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  Corporation's  Compensation  Committee of the Board of
            Directors,  shall in good  faith,  after the end of each  fiscal  year
            consider   and  cause  the   Corporation   to  grant  to  Executive  a
            discretionary  bonus,  based upon standards  which the Chairman of the
            Corporation, subject to the approval of the Corporation's Compensation
            Committee of the Board of Directors, shall establish with Executive at
            the  beginning  of the each fiscal year  commencing  after the date of
            this Agreement and for the period from the date of the Agreement until
            May 31, 2007 and which  standards may be modified  thereafter with the
            approval  of  the  Compensation  Committee.  The  bonus  provided  for
            hereunder shall be payable by the Corporation to Executive  within 120
            days of the end of the fiscal year, for the period to which such bonus
  
                                         4
  relates.  The Company shall pay to the Employee as an advance  payment
            of the bonus  within 30 days after the end of each  fiscal  quarter an
            amount equal to the bonus which would have been earned through the end
            of  such  fiscal  quarter,  based  on the  standards  approved  by the
            Compensation  Committee.  Each such advance payment of the bonus shall
            be  approved  by the  Compensation  Committee  unless  it is  paid  in
            accordance with a formula approved in advance for such fiscal year. In
            the event that following any fiscal quarter or following completion of
            the Company's audited financial statements, any advance payment of the
            bonus  previously  paid with  respect to any fiscal  year (or  portion
            thereof)  exceeds the amount that Executive is entitled to through the
            end of such fiscal  quarter or fiscals year,  Employee  shall promptly
            return such excess.
  
       (b)  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 is entitled to executive medical
            benefits  and also shall be entitled to a car (leased or owned at sole
            discretion of the Corporation) in such amounts for the car as shall be
            determined by the Board of Directors of the Corporation. Any or all of
            such entitlements in the preceding sentence 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
  in connection with 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 indicted of
            a felony, (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  or any policy  established  by the  Corporation's  Board of
            Directors  and fail to  correct  such  breach  within  ten days  after
            written notice of commission thereof.
  
      (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
  
                                         5
  (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)   The  Corporation   may  terminate  this  Agreement  and   Executive's
            employment  hereunder  for any  reason  other than as  provided  under
            Section 6(a),  (b), or (c),  upon thirty (30) days' written  notice to
            Executive and, in such event,  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 two (2)
            year's salary at the Base Salary,  payable in  forty-eight  (48) equal
            semi-monthly installments.
  
            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 eighteen  (18) months after  termination  to
            participate in the health benefit program provided to all employees of
            the  Corporation  which may then be in effect.  The cost of  providing
            such  coverage  under  health  benefit  program  will  be  paid by the
            Corporation.
  
  7. In the event that during the Term the  Executive's  employment  is terminated
  without Cause in  anticipation of or within one year after a "Change in Control"
  (as defined below):
  
       (a)  (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:
  
            (A)  his full  salary  at the Base  Salary  in  effect  at the date of
                 termination for two years.
  
            (B)  two (2) times his bonus for the then current  fiscal year,  or if
                 that  amount can not be  determined,  two (2) times the amount of
                 the bonus paid in the prior fiscal year.
  
                                         6
  (C)  the Company will  continue to provide all benefits  enumerated in
                 Paragraph  4 of this  Agreement  for a maximum of  eighteen  (18)
                 months.
  
      (b)    As used herein, the term "Change in Control" shall mean:
  
            (i) any "person" or "group" (as such terms are used in Sections  13(d)
            and 14(d) of the Securities Exchange Act of 1934 (the "Exchange Act"),
            which is not  currently a person who  controls  (within the meaning of
            Rule 12b-2 promulgated  under the Exchange Act),  individually or as a
            member of a group,  the Company is or becomes the  "beneficial  owner"
            (as  defined  in Rule  13d-3  promulgated  under  the  Exchange  Act),
            directly or indirectly,  of securities of the Corporation representing
            50.1% or more of the combined voting power of the  Corporation's  then
            outstanding  securities.
  
            (ii) 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
  
            (iii) 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.
  
  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
  
                                         7
  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:
  
          If to the Corporation at:
  
                  Chairman of the Board
                  TSR, Inc.
                  400 Oser Avenue
                  Hauppauge, New York 11788
  
          With a copy to:
  
                  Mr. John Sharkey
                  Vice President of Finance
                  TSR, Inc.
                  400 Oser Avenue
                  Hauppauge, New York 11788
  
          If to the Executive at:
  
                  Mr. Christopher Hughes
                  xxxxxxx
                  xxxxx, New York
  
       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.
  
                                         8
  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.
  
  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/ Christopher Hughes
  ----------------------
  Christopher Hughes
  Executive
  
  TSR, Inc.
  
  By:    /s/ Joseph F. Hughes
         ----------------------
  Name:  Joseph F. Hughes
  Title: Chairman