Exhibit 10.1    



EMPLOYMENT AGREEMENT  



FOR  



ROBERT STRONG  



        THIS
AGREEMENT, made as of November 12, 2003, is by and between QUAINT OAK SAVINGS BANK, a
Pennsylvania mutual savings bank with principal offices at 607 Lakeside Drive,
Southampton, PA 18966 (“Bank”) and ROBERT T. STRONG, an individual residing at
1445 Estate Lane, Southampton, PA 18966 (“Executive”). 



Background 



                A.
                 Bank
and Executive wish to enter into an employment agreement pursuant to which           Bank
wishes to secure the services of Executive as it’s President and Chief
          Executive Officer for a period of not less than three (3) years.  



                B.                 Executive
is willing to enter into this Employment Agreement (this           “Agreement”)
for such period upon the terms and conditions herein set           forth.  



                C.                 The
Bank’s Board of Directors has approved this Agreement.  



                NOW
THEREFORE, in consideration of the mutual promises and agreements set forth herein, the
parties agree as follows:  



        1.       Employment.  



                1.1
      Bank shall employ Executive, and Executive shall serve, as President and Chief
Executive Officer of Bank during the “Term” defined in Section 2 of this
Agreement.  



                1.2
      If at any time during the Term the Bank shall fail to reappoint Executive as
President or Chief Executive Officer of Bank or shall remove him from such office, or if
at any time during the Term Executive shall fall to be vested by Employer with the powers
and authority above, Executive shall have the right, by written notice to Bank satisfying
the requirements of Section 7.7(c), to terminate his services hereunder, and Executive
shall have no further obligation under this Agreement. Termination of Executive’s
services under this Section 1 shall be treated as a termination of employment by Bank
other than for cause and shall be governed by the provisions of Section 7.7(d) of this
Agreement.  



        2.       Term
of Employment. The term of Executive’s employment           hereunder
(the “Term”) shall be for a period of three (3) years           commencing on
July I0, 2002 and ending on July 9, 2005. The Term shall be           extended
automatically for one additional year on each anniversary date of the
          commencement of the Term, unless either Bank or Executive gives contrary
written           notice to the other not less than 30 days, or more than 90 days, in
advance of           each anniversary date hereof on which this Agreement would otherwise
be           extended. References in this  




 
	 	 
	 















Agreement to the “Term” shall
refer both           to such initial term of employment and such successive terms.  



        3.       Compensation.
Bank shall pay or cause to be paid to           Executive during the Term a base salary
of not less than Eighty Five Thousand           Dollars ($85,000.00) per annum, payable
in biweekly installments during each           year of the Term (the “Base Salary”).
It is understood that Bank may,           in the discretion of its Board of Directors,
increase such base salary in light           of Executive’s job duties and
performance and such other factors as           adjustment in cost of living.  



        4.       Bonuses.
Executive shall be eligible for such bonuses, if           any, as may be authorized and
declared by the Board of Directors in its           discretion for executives or other
employees.  



	  	        5.       Employee
Benefit Plans; Fringe Benefits.  







                5.1
      During the Term, subject to applicable law, Executive shall be entitled to
participate in such additional benefits and plans as Bank may adopt for the benefit of
its employees.  



                5.3
      During the Term, Bank shall reimburse Executive for reasonable expenses incurred by
him in the performance of his duties, the payment of reasonable expenses for attending
annual and periodic meetings of trade associations, and any other benefits which are
commensurate with the duties and responsibilities to be performed by Executive under this
Agreement.  



        6.       Vacations;
Sick Days. Executive shall be entitled to an           annual paid
vacation of four weeks per year and paid sick leave of ten days per           year, or
such longer periods respectively as the Board of Directors of Bank may           approve.
The timing of paid vacations shall be scheduled in a reasonable manner           by
Executive. Executive shall not be entitled to receive any additional
          compensation from Bank on account of his failure to take a paid vacation.
          Executive shall also not be entitled to accumulate unused paid vacation time
          from one calendar year to the next, except with the approval of the Board of
          Directors of Bank.  



        7.       Termination
of Employment.  



        7.1
      Bank shall have the right, at any time upon prior written Notice of Termination
satisfying the requirements of Section 7.7(c) hereunder, to terminate Executive’s
employment hereunder, including without limitation termination for cause. For the purpose
of this Agreement, termination for “cause” shall mean termination for personal
dishonesty, incompetence, willful misconduct, breach of fiduciary duty involving personal
profit, conviction of a felony, or willful violation of any law, rule or regulation or
final cease-and-desist order which in the reasonable judgment of the Board of Directors
of the Bank will probably cause substantial economic damages to the Bank, willful or
intentional breach or neglect by Executive of his duties, or material breach of any
material provision of this Agreement. For purposes of this paragraph, no act, or failure
to act on Executive’s part shall be considered “willful” unless done, or
omitted to be done, by him not in good faith and without reasonable belief that this
action or  




 
	 	
-
2 -	 















omission was in the best interest of
Bank; provided that any act or omission to act on Executive’s behalf in reliance
upon an opinion of counsel to the Bank or counsel to the Executive shall not be deemed to
be willful. The terms “incompetence” and “misconduct” shall be
defined with reference to standards generally prevailing in the banking industry. In be
defined with reference to standards generally prevailing in the banking industry. In
determining incompetence and misconduct, Bank shall have the burden of proof with regard
to the acts or omission of Executive and the standards prevailing in the banking
industry.  



                7.2
      In the event employment is terminated for cause pursuant to Section 7.1 hereof,
Executive shall have no right to compensation or other benefits for any period after such
date of termination. If Executive is terminated by Bank other than for cause, Employee’s
right to compensation and other benefits under this Agreement shall be as set forth in
Sections 7.7(d) hereof.  



                7.3
      Executive shall have the right, upon prior written Notice of Termination of not
less than thirty (30) days satisfying the requirements of Section 7.7(c) hereof, to
terminate his employment hereunder, but in such event Executive shall have no right after
the date of termination to compensation or other benefits as provided in this Agreement,
unless such termination is for “good reason”, as defined pursuant to Section
7.7(a) hereof. If Executive provides a Notice of Termination for “good reason”,
as defined pursuant to Section 7.7(a) hereof, the date of termination shall be the date
on which a Notice of Termination is given.  



                7.4
      If Executive is suspended from office and/or temporarily prohibited from
participating in the conduct of Bank’s affairs pursuant to notice served by any
Regulatory Agency, Bank’s obligations under this Agreement shall be suspended as of
the date of service, unless stayed by appropriate proceedings. If the charges in the
notice are dismissed, Bank shall: (i) pay Executive all the compensation withheld while
contract obligations were suspended, and (ii) reinstate (in whole or in part) any of its
obligations which were suspended.  



                7.5
      If Executive is removed from office and/or permanently prohibited from
participating in the conduct of Bank’s affairs by an order issued by any Regulatory
Agency, all obligations of Bank under this Agreement shall terminate as of the effective
date of the order, but rights of the Executive to compensation earned as of the date of
termination shall not be affected.  



                7.6
      All obligations under this Agreement are subject to termination by any Regulatory
Agency in accordance with any applicable provisions of law or regulations granting such
authority, but rights of the Executive to compensation earned as of the date of
termination shall not be affected.  



                7.7
(a)   Executive may terminate his employment hereunder for “good reason”. For purposes of
this Agreement, “good reason” shall mean (A) a failure by Bank to comply with any
material provision of this Agreement, which failure has not been cured within ten (10)
days after a notice of such noncompliance has been given by Executive to Bank; (B)
subsequent to a “change in control” of Bank (as defined in Section 7.7(b) of
this Agreement) and without Executive’s express written consent, any of the
following shall occur: (i) the assignment to Executive of any duties inconsistent with
Executive’s positions, duties, responsibilities, titles or  





 
	 	
-
3 -	 
















offices as in effect immediately
prior to a change in control of Bank, (ii) any removal of Executive from, or any failure
to re-elect Executive to, any of such positions, except in connection with a termination
of employment for cause, disability, death, retirement or pursuant to Sections 7.1 or 7.5
hereof, (iii) a reduction in Executive’s annual salary as the same may be increased
from time to time, or (iv) the failure to continue in effect any benefit, or any
compensation or benefit plan in which Executive is participating, or the taking, without
cause, of any action by Bank which would adversely affect Executive’s benefits; or
(C) any purported termination of Executive’s employment which is not effected
pursuant to a Notice of Termination satisfying the requirements of paragraph 7.7(c)
hereof (and for purposes of this Agreement no such purported termination shall be
effective); or (D) notwithstanding any other provision of this Agreement if a substantial
portion of the assets of the Bank are acquired, or a substantial portion of the
liabilities of Bank are assumed, by an organization that fails to assume contractually,
in writing, the obligations of Bank under this Agreement, Executive may, at any time
thereafter, elect to give Notice of Termination, but specify that such termination shall
be effective as of a time immediately prior to such acquisition or assumption, and in any
such event such election by Executive to terminate Executive’s employment shall be
deemed to be for “good reason.” 



                        (b)                 for
purposes of this Agreement, a “change in control” of Bank shall           mean
either (A) any individual or entity, or group of individuals or entities           acting
in concert, becomes, or become together, the “beneficial owner”          (as
defined in Rule 133-3 under the Securities Exchange Act of 1934 or any
          successor equivalent provision), directly or indirectly, of securities of Bank
          representing 25% or more of the combined voting power of Bank’s then
          outstanding securities, or (B) during any period of two consecutive years
during           the term of this Agreement, individuals who at the beginning of such
period           constitute the Board of Directors cease for any reason to constitute at
least a           majority thereof, unless the election of each director who was not a
director at           the beginning of such period has been approved in advance by
directors           representing at least two-thirds of the directors then in office who
were           directors at the beginning of the period, or (C) during any period of two
          consecutive years during the term of this Agreement, individuals and entities
          who at the beginning of such period are depositors of the Bank cease for any
          reason to constitute depositors of the Bank holding at least a majority in
          dollar amount of the Bank’s deposits, or (D) a substantial portion of the
          assets of the Bank are acquired, or a substantial portion of the liabilities of
          Bank are assumed, by an organization that fails to assume contractually, in
          writing, the obligations of Bank under this Agreement.  



                        (c)                 Any
termination of Executive’s employment by Bank or by Executive shall be
          communicated by written Notice of Termination to the other party hereto. For
          purposes of this Agreement, a “Notice of Termination” shall mean a
          dated notice which shall (A) indicate the specific termination provision in
this           Agreement relied upon; (B) 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; (C) specify a date of termination,
          which shall (except as otherwise provided in this Agreement) be not less than
          thirty (30) nor more than ninety (90) days after such Notice of Termination is
          given, except in the case of Bank’s termination of Executive’s
          employment for cause pursuant to Section 7.1 hereof, in which case the Notice
of           Termination may specify a date of termination as early as the date such
Notice           of Termination is given; and (D) be given in the manner specified in
Section 11           hereof.  





 
	 	
-
4 -	 















                        (d)                 If
Executive shall terminate his Employment for good reason pursuant to subpart
          (B) or (D) of Section 7.7(a) hereof, then in lieu of any further salary
payments           to Executive for periods subsequent to the date of termination, Bank
shall pay           as severance to Executive an amount equal to (A) the average
aggregate annual           compensation paid by Bank to the Executive and includable in
the           Executive’s gross income for federal income tax purposes during the
three           calendar years preceding the taxable year in which the date of
termination           occurs (or such lesser amount of time if the Executive has not been
employed by           Bank for three years at the time of termination), multiplied by (B)
2.99, such           payment to be made in a lump sum on or before the fifth day
following the date           of termination; provided, however, that if the lump
sum severance payment           under this Section 7.7(d), either along or together with
other payments which           the Executive has the right receive from the Bank, would
constitute a           “parachute payment” (as defined in Section 280G of the
Internal           Revenue Code of 1986, as amended (the “Code”), such lump sum
severance           payment shall be reduced to the largest amount as will result in no
portion of           the lump sum severance payment under this Section 7.7(d) being
subject to the           excise tax imposed by Section 4999 of the Code. The
determination of any           reduction in the lump sum severance payment under this
Section 7.7(d) pursuant           to the foregoing provision shall be made by independent
counsel to Bank in           consultation with the independent certified public
accountants of Bank.  



                        (e)                 If
Executive shall terminate his employment for good reason as defined in           subpart
(A) or (C) of Section 7.7(a) hereof or if Executive is terminated by           Bank other
than for cause pursuant to Section 7.7 hereof, then in lieu of any           further
salary payments to Executive for periods subsequent to the date of           termination,
Bank shall pay, as severance to Executive, Executive’s total           annual
compensation paid pursuant to Section 3 hereof, in effect as of the date           of
termination (but not less than the total annual compensation paid pursuant to
          Section 3 for the 12 months prior to the year of termination), over the
          remaining term of employment provided in this Agreement, payable in equal
          installments on the normal pay dates commencing immediately after the date of
          termination.  



                        (f)                 Executive
shall not be required to mitigate the amount of any payment provided           for in
paragraph (d) or (e) of this Section 7.7 by seeking other employment or
          otherwise.  



                7.8
      If Bank is in default, as defined to mean an adjudication or other official
determination of a court of competent jurisdiction or other public authority pursuant to
which a conservator, receiver or other legal custodian is appointed for Bank for the
purpose of liquidation, all obligations under this Agreement shall terminate as of such
date as a competent governmental authority may lawfully terminate this Agreement, but
rights of the Executive to compensation earned prior to such termination shall not be
affected.  



                7.9
      As used in this Section 7, “Regulatory Agency” includes any governmental agency
having regulatory or supervisory jurisdiction over Bank at the time of reference.  





 
	 	
-
5 -	 
















        8.       Death
and Disability.  



                8.1
      Upon the death of Executive during the term hereof, all compensation payments
hereunder shall continue for a period of one year after the end of the pay period in
which Executive’s death shall occur, at which point such payments shall cease and
Bank shall have no further obligations or liabilities hereunder to Executive’s
estate or legal representative or otherwise, except that Bank shall pay to Executive’s
estate or legal representation, based upon the portion of the calendar year that
Executive was employed by Bank prior to his death, the prorated portion of any bonus
Executive would have anticipated earning if he had remained in the employ of Bank for the
full calendar year (payable at such time that Executive would have received such bonus).  



                8.2
      If Executive becomes unable to perform his duties hereunder due to partial or total
disability or incapacity resulting from a mental or physical illness, injury or any
similar cause, Bank will continue the payment of Executive’s compensation at his
then current rate for a period of one year following the date Executive is first unable
to perform his duties due to such disability or incapacity. Thereafter, Bank shall have
no obligation for the Base Salary or other compensation payments to Executive during the
continuance of such disability or incapacity, except that Bank shall pay to Executive,
based upon the portion of the calendar year that Executive was able to perform his duties
prior to the disability, the pro rata portion of any bonus that Executive would have
anticipated earning if he had remained in the employee of Bank for the full calendar year
(payable at such time that Executive would have received such bonus). In the event of any
dispute between the Executive and the Bank as to the Executive’s disability, the
matter shall be resolved by a majority vote of a panel of physicians, one of whom shall
be selected by the Executive, one of whom shall be selected by the Bank, and one of whom
shall be selected by the other two physicians. The physicians’ fees and any other
costs associated with the resolution of said dispute shall be borne by the Bank.  



        9.       Payment
Obligations Absolute. Bank’s obligation to pay           Executive
the compensation and other benefits provided herein shall be absolute           and
unconditional and shall not be affected by any circumstances, including,
          without limitation, any set-off counter claim, recoupment, defense or other
          right which Bank may have against Executive. All amounts payable by Bank
          hereunder shall be paid without notice or demand.  



        10.       Continuing
Obligations. Executive shall retain in           confidence any
confidential information known to him concerning Bank and its           business so long
as such information is not publicly disclosed.  



        11.       Amendments.
No amendments to this Agreement shall be           binding unless in writing and signed
by both parties.  



        12.       Notices.
All notices under this Agreement shall be in writing and           shall be deemed
effective (i) when delivered in person or by facsimile,           telecopier, telegraph
or other electronic means capable of being embodied in           written form (in Bank’s
case, to its Chairman) or (ii) forty-eight (48)           hours after deposit thereof in
the U.S. mails by certified or registered mail,           return receipt requested,
postage prepaid, addressed, in the case of Executive,           to his last known address  




 
	 	
-
6 -	 















as carried on the personnel records
of Bank and, in           the case of Bank, to the corporate headquarters, attention of
the Secretary, or           to such other address as the party to be notified may specify
by notice to the           other party.  



        13.       Prior
Agreements. This Agreement supersedes and replaces           all prior
Agreements of Employment between the parties.  



        14.       Assigns
and Successors. The rights and obligations of Bank           and Executive
under this Agreement shall inure to the benefit of and shall be           binding upon
the successors, heirs, personal representatives and assigns of Bank           and
Executive, respectively, and in addition upon any organization or individual
          that agrees to assume the obligations of Bank hereunder.  



        15.       Construction.
This Agreement shall be construed under the           laws of the Commonwealth of
Pennsylvania, as they may be pre-empted by federal           laws and regulations.
Section headings are for convenience only and shall not be           considered a part of
the terms and provisions of the Agreement.  



        IN
  WITNESS WHEREOF, the parties hereto have caused the due execution of this Agreement
  as of the date first set forth above. 

	 	 	QUAINT OAK SAVINGS BANK
	 	  	 
	/s/ Kenneth R. Gant

    	 	By:	/s/ Robert J. Phillips

    	 
	
      

    	 	 	
      

    	 
	Kenneth R. Gant	 	 	Robert J. Phillips	 
	Title: Secretary	 	 	Chairman	 
	  	 	 	 	 
	Witness:	 	Executive:
	 	 	 	 	 
	/s/ Diane J. Colyer
      

    	 	/s/ Robert T. Strong
      

    	 
	 Diane J. Colyer	 	Robert T. Strong, individually	 


 



 
	 	
-
7 -	 













AMENDMENT NUMBER 1

                                                       to the

                                                EMPLOYMENT AGREEMENT

                                                   by and between

                                               QUAINT OAK SAVINGS BANK

                                                         and

                                                  ROBERT T. STRONG 



RECITALS 



        WHEREAS,
Quaint Oak Savings Bank (the “Bank”) and Robert T. Strong (the “Executive”)  entered into
an Employment Agreement dated as of November 12, 2003 (referred to hereinafter  as the
 “Agreement”)  (capitalized  terms used but not defined herein shall have the meaning
ascribed to them in the Agreement); 



        WHEREAS,
 on  February  15,  2007,  the Board of  Trustees  of the Bank approved a Plan of
Conversion,  pursuant to which (i) the Bank will convert from the mutual to the stock
form of organization (the  “Conversion”),  (ii) the Bank will issue all of the
outstanding  stock to a newly formed  corporation,  Quaint Oak Bancorp, Inc. (the
“Corporation”) and (iii) the Corporation will offer, sell and issue its stock to
depositors of the Bank,  employee stock benefit plans and the general public; 



        WHEREAS,
 the Board  believes  that it is in the best  interests of the Bank and its  depositors
to amend the Agreement to ensure that the  transactions contemplated  by the Plan of
Conversion  will not constitute a Change in Control of the Bank; 



        WHEREAS,
 the Bank and the Executive desire to continue the services of the Executive as an
employee beyond the date of the Conversion; and 



        WHEREAS,
 the Bank and the  Executive  desire to amend the Agreement to reflect certain mutually
agreed upon revisions. 



        NOW,
 THEREFORE,  in  consideration  of the mutual covenants herein set forth,  the Bank and
the  Executive  do hereby  agree to amend the  Agreement as follows: 



1.    Section
7.2 of the  Agreement  is hereby  amended  and  restated in its          entirety to
change the reference in the last sentence to Section 7.7(e)          from Section 7.7(d)
as follows: 


             7.2
  In the event employment is terminated for cause pursuant to Section 7.1 hereof,
  Executive shall have no right to compensation or other benefits for any period
  after such date of termination. If Executive is terminated by the Bank other
  than for cause, Executive’s right to compensation and other benefits under
  this Agreement shall be as set forth in Sections 7.7(d) or 7.7(e) hereof, as
  applicable. 



2. Section 7.7(b) of the Agreement
is hereby amended and restated as follows: 





 
	 	
	 



 
              (b)
  for purposes of this Agreement, a “Change in Control” shall mean a
  change in the ownership of Quaint Oak Bancorp, Inc. (the “Corporation”)
  or the Bank, a change in the effective control of the Corporation or the Bank
  or a change in the ownership of a substantial portion of the assets of the Corporation
  or the Bank, in each case as provided under Section 409A of the Internal Revenue
  Code of 1986, as amended, and the regulations thereunder, provided that neither
  the conversion of the Bank from the mutual to stock form organization undertaken
  pursuant to the Plan of Conversion adopted by the Board of Trustees of the Bank
  on February 15, 2007, as amended (“Plan of Conversion”) nor any of
  the other transactions contemplated by the Plan of Conversion shall constitute
  a Change in Control. 



3. Section 7.7(d) of the Agreement
is hereby amended and restated as follows: 



              (d)
  If the Executive is terminated by the Bank other than for cause pursuant to
  Section 7.2 subsequent to a “change in control” of the Bank (as defined
  in section 7.7(b) of this Agreement) or if Executive shall terminate his Employment
  for good reason pursuant to subpart (B) or (D) of Section 7.7(a) hereof, then
  in lieu of any further salary payments to Executive for periods subsequent to
  the date of termination, Bank shall pay as severance to Executive an amount
  equal to (A) the average aggregate annual compensation paid by Bank to the Executive
  and includable in the Executive’s gross income for federal income tax purposes
  during the three calendar years preceding the taxable year in which the date
  of termination occurs (or such lesser amount of time if the Executive has not
  been employed by Bank for three years at the time of termination), multiplied
  by (B) 2.99, such payment to be made in a lump sum on or before the fifth day
  following the date of termination; provided, however, that if the lump sum severance
  payment under this Section 7.7(d), either along or together with other payments
  which the Executive has the right receive from the Bank, would constitute a
  “parachute payment” (as defined in Section 280G of the Internal Revenue
  Code of 1986, as amended (the “Code”), such lump sum severance payment
  shall be reduced to the largest amount as will result in no portion of the lump
  sum severance payment under this Section 7.7(d) being subject to the excise
  tax imposed by Section 4999 of the Code. The determination of any reduction
  in the lump sum severance payment under this Section 7.7(d) pursuant to the
  foregoing provision shall be made by independent counsel to Bank in consultation
  with the independent certified public accountants of Bank. 



4.  Section  7.7(e) of the
 Agreement  is hereby  amended  and  restated  in its entirety as follows: 



              (e)
  If Executive shall terminate his employment for good reason as defined in subpart
  (A) or (C) of Section 7.7(a) hereof or if Executive is terminated by Bank other
  than for cause pursuant to Section 7.2 hereof and other than subsequent to a
  “change in control” of the Bank (as defined in section 7.7(b) of this
  Agreement), then in lieu of any further salary payments to Executive for periods
  subsequent to the date of termination, Bank shall pay, as severance to Executive,
  three times the Executive’s total annual compensation paid pursuant to
  Section 3 hereof, in effect as of the date of termination payable in thirty-six
  (36) equal monthly installments commencing immediately after the date of termination.
  



5. All other  sections and
provisions in the Agreement as amended shall continue in full force and effect and are
 incorporated  by reference into this Amendment Number 1. 





 
	 	
2	 



 
        IN
  WITNESS WHEREOF, this Amendment Number 1 to the Agreement has been signed by
  or on behalf of each of the parties hereto, all as of March 19, 2007. 

  

  

	Attest:	 	QUAINT OAK SAVINGS BANK
	 	  	 
	/s/ Kenneth R. Gant
    	 	By:	/s/ Robert J. Phillips
    	 
	
      

    	 	 	
      

    	 
	Kenneth R. Gant	 	 	Robert J. Phillips	 
	Title: Secretary	 	 	Chairman	 
	  	 	 	 	 
	Witness:	 	Executive:
	 	 	 	 	 
	/s/ Diane J. Colyer
      

    	 	/s/ Robert T. Strong
      

    	 
	 Diane J. Colyer	 	Robert T. Strong, individually	 


 

    

	 	 3