**Exhibit      10.3**

**DELANCO      BANCORP, INC.**

**EMPLOYMENT      AGREEMENT**

**THIS      AGREEMENT**
**DELANCO      BANCORP, INC., **
**DOUGLAS      R. ALLEN, JR. **

**WHEREAS,      **

**WHEREAS,      **

**WHEREAS,      **

**NOW,      THEREFORE, **

**1.**
**Employment**
**.      **

**2.**
**Location      and Facilities**
**.**

**3.**
**Term**
**.**

|   | a. | The                term of this Agreement shall include: (i) the initial term, consisting                of                the period commencing on the date of this Agreement (the “Effective Date”)                and ending on the third anniversary of the Effective Date, plus (ii)                any                and all extensions of the initial term made pursuant to this Section                3. |
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|   | b. | Commencing                on the first anniversary of the Effective Date and continuing on                each                anniversary of the Effective Date thereafter, the disinterested members                of                the Board may extend the Agreement term for an additional year, so                that                the remaining term of the Agreement again becomes thirty-six (36)                months,                unless Executive elects not to extend the term of this Agreement                by giving                written notice in accordance with Section 18 of this Agreement. The                Board                will review the Agreement and Executive’s performance annually for                purposes of determining whether to extend the Agreement term and                will                include the rationale and results of its review in the minutes of                its                meeting. The Board will notify Executive as soon as possible after                its                annual review whether it has determined to extend the                Agreement. |
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**4.**
**Base      Compensation**
**.      **

|   | a. | For                his services as Senior Vice President and Treasurer, the Company                agrees to                pay Executive an annual base salary at the rate of **$**88,825                per year, payable in accordance with customary payroll practices.                Following October 1, 2007, the Board shall adjust Executive’s annual base                salary upward to reflect his new duties and                responsibilities. |
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|   | b. | During                the term of this Agreement, the Board will review the level of Executive’s                base salary at least annually, based upon factors deemed relevant,                in                order to determine Executive’s base salary through the remaining term of                the Agreement. |
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**5.**
**Bonuses**
**.**

**6.**
**Benefit      Plans**
**.**

**7.      **
**Vacations      and Leave**
**.**

|   | a. | Executive                may take vacations and other leave in accordance with applicable                policy                for senior executives, or otherwise as approved by the                Board. |
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|   | b. | In                addition to paid vacations and other leave, the Board may grant Executive                a leave or leaves of absence, with or without pay, at such time or                times                and upon such terms and conditions as the Board, in its discretion,                may                determine. |
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**8.**
**Expense      Payments and Reimbursements**
**.      **

**9.**
**Loyalty      and Confidentiality**
**.**

|   | a. | During                the term of this Agreement, Executive will devote all his business                time,                attention, skill, and efforts to the faithful performance of his                duties                under this Agreement; provided, however, that from time to time,                Executive                may serve on the boards of directors of, and hold any other offices                or                positions in, companies or organizations that will not present any                conflict of interest with the Company or any of its subsidiaries                or                affiliates, unfavorably affect the performance of Executive’s duties                pursuant to this Agreement, or violate any applicable statute or                regulation. Executive will not engage in any business or activity                contrary                to the business affairs or interests of the Company or any of its                subsidiaries or affiliates. |
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|   | b. | Nothing                contained in this Agreement will prevent or limit Executive’s right to                invest in the capital stock or other securities or interests of any                business dissimilar from that of the Company, or, solely as a passive,                minority investor, in any business. |
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|   | c. | Executive                agrees to maintain the confidentiality of any and all information                concerning the operations or financial status of the Company and                its                affiliates; the names or addresses of any borrowers, depositors and                other                customers; any information concerning or obtained from such customers;                and                any other information concerning the Company or its affiliates to                which he                may be exposed during the course of his employment. Executive further                agrees that, unless required by law or specifically permitted by                the Board                in writing, he will not disclose to any person or entity, either                during or                subsequent to his employment, any of the above-mentioned information                which                is not generally known to the public, nor will he use the information                in                any way other than for the benefit of the Company or its                affiliates. |
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**10.**
**Termination      and Termination Pay**
**.      **

|   | a. | Death.                Executive’s employment under this Agreement will terminate upon his death                during the term of this Agreement, in which event Executive’s estate will                receive the compensation due to Executive through the last day of                the                calendar month in which his death                occurred. |
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|   | b. | Retirement.                This Agreement will terminate upon Executive’s retirement under the                retirement benefit plan or plans in which he participates pursuant                to                Section 6 of this Agreement or otherwise. |
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|   |   |   |
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|   | c. | Disability. |
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|   | i. | The                Board or Executive may terminate Executive’s employment after having                determined Executive has a Disability. For purposes of this Agreement,                “Disability” means a physical or mental infirmity that impairs Executive’s                ability to substantially perform his duties under this Agreement                and                results in Executive becoming eligible for long-term disability benefits                under any long-term disability plans of the Company or the Bank (or,                if no                such plans exist, that impairs Executive’s ability to substantially                perform his duties under this Agreement for a period of one hundred                eighty                (180) consecutive days). The Board will determine whether or not                Executive                is and continues to be permanently disabled for purposes of this                Agreement                in good faith, based upon competent medical advice and other factors                that                the Board reasonably believes to be relevant. As a condition to any                benefits, the Board may require Executive to submit to physical or                mental                evaluations and tests as the Board or its medical experts deem reasonably                appropriate. |
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|   | ii. | In                the event of his Disability, Executive will no longer be obligated                to                perform services under this Agreement. The Company will pay Executive,                as                Disability pay, an amount equal to one hundred percent (100%) of                Executive’s rate of base salary in effect as of the date of his                termination of employment due to Disability. The Company will make                Disability payments on a monthly basis commencing on the first day                of the                month following the effective date of Executive’s termination of                employment due to Disability and ending on the earlier of: (A) the                date he                returns to full-time employment in the same capacity as he was employed                prior to his termination for Disability; (B) his death; (C) his attainment                of age 65; or (D) the date this Agreement would have expired had                Executive’s employment not terminated by reason of Disability. The Company                will reduce Disability payments by the amount of any short- or long-term                disability benefits payable to Executive under any other disability                programs sponsored by the Company. In addition, during any period                of                Executive’s Disability, the Company will continue to provide Executive and                his dependents, to the greatest extent possible, with continued coverage                under all benefit plans (including, without limitation, retirement                plans                and medical, dental and life insurance plans) in which Executive                and/or                his dependents participated prior to his Disability on the same terms                as                if he remained actively employed by the                Company. |
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|   | d. | Termination                for Cause. |
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|   | i. | The                Board may, by written notice to Executive in the form and manner                specified                in this paragraph, immediately terminate his employment at any time                for                “Cause.” Executive shall have no right to receive compensation or other                benefits for any period after termination for Cause, except for already                vested benefits. Termination for Cause shall mean termination because                of,                in the good faith determination of the Board, Executive’s: |
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|   | (1) | Personal                dishonesty; |
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|   | (2) | Incompetence; |
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|   | (3) | Willful                misconduct; |
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|   | (4) | Breach                of fiduciary duty involving personal                profit; |
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|   | (5) | Intentional                failure to perform stated duties; |
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|   | (6) | Willful                violation of any law, rule or regulation (other than traffic violations                or                similar offenses) or final cease-and-desist order;                or |
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|   | (7) | Material                breach of any provision of this                Agreement. |
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|   | ii. | Notwithstanding                the foregoing, Executive’s termination for Cause will not become effective                unless the Company has delivered to Executive a copy of a resolution                duly                adopted by the affirmative vote of a majority of the entire membership                of                the Board, at a meeting of the Board called and held for the purpose                of                finding that, in the good faith opinion of the Board (after reasonable                notice to Executive and an opportunity for Executive to be heard                before                the Board with counsel), Executive was guilty of the conduct described                above and specifying the particulars of this                conduct. |
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|   | e. | Voluntary                Termination by Executive.                In addition to his other rights to terminate under this Agreement,                Executive may voluntarily terminate employment during the term of                this                Agreement upon at least sixty (60) days prior written notice to the                Board.                Upon Executive’s voluntary termination, he will receive only his                compensation and vested rights and benefits through the date of his                termination. Following his voluntary termination of employment under                this                Section 10(e), Executive will be subject to the restrictions set                forth in                Section 10(g) of this Agreement for a period of one (1) year from                his                termination date. |
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|   | f. | Without                Cause or With Good Reason. |
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|   | i. | In                addition to termination pursuant to Sections 10(a) through 10(e),                the                Board may, by written notice to Executive, immediately terminate                his                employment at any time for a reason other than Cause (a termination                “Without Cause”) and Executive may, by written notice to the Board,                immediately terminate this Agreement at any time within ninety (90)                days                following an event constituting “Good Reason,” as defined below (a                termination “With Good Reason”). |
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|   | ii. | Subject                to Section 11 of this Agreement, in the event of termination under                this                Section 10(f), Executive will receive his base salary as of his                termination date for the remaining term of the Agreement, with such                amount                paid in one lump sum within ten (10) calendar days of his termination.                Executive will also continue to participate in any benefit plans                of the                Company or the Bank that provide medical, dental and life insurance                coverage for the remaining term of the Agreement, under terms and                conditions no less favorable than the most favorable terms and conditions                provided to senior executives during the same period. If the Company                or                the Bank cannot provide such coverage because Executive is no longer                an                employee, the Company or the Bank will provide Executive with comparable                coverage on an individual policy basis or the cash                equivalent. |
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|   | iii. | “Good                Reason” exists if, without Executive’s express written consent, the                Company materially breaches any of its obligations under this Agreement.                Without limitation, such a material breach will occur upon any of                the                following: |
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|   | (1) | A                material reduction in Executive’s responsibilities or authority in                connection with his employment with the Company (other than a reduction                resulting from the change in Executive’s position described in Section 1                of this Agreement); |
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|   | (2) | Assignment                to Executive of duties of a non-executive nature or duties for which                he is                not reasonably equipped by his skills and experience (excluding any                change                in duties resulting from the change in Executive’s position described in                Section 1 of this Agreement); |
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|   | (3) | Failure                of Executive to be nominated or renominated to the Board to the extent                Executive is a Board member prior to the Effective Date; |
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|   | (4) | A                reduction in salary or benefits contrary to the terms of this Agreement                (other than a reduction resulting from the change in Executive’s position                described in Sections 1 and 4 of this Agreement), or, following a                Change                in Control as defined in Section 11 of this Agreement, any reduction                in                salary or material reduction in benefits below the amounts Executive                was                entitled to receive prior to the Change in                Control; |
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|   | (5) | Termination                of incentive and benefit plans, programs or arrangements, or reduction                of                Executive’s participation, that is not applicable to other similarly                situated participants and to such an extent as to materially reduce                their                aggregate value below their aggregate value as of the Effective Date; |
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|   | (6) | A                requirement that Executive relocate his principal business office                or his                principal place of residence outside of the area consisting of a                thirty-five (35) mile radius from the current main office and any                branch                of the Company or the Bank, or the assignment to Executive of duties                that                would reasonably require such a relocation;                or |
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|   |   |   |
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|   | (7) | Liquidation or dissolution of the              Company. |
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|   | iv. | Notwithstanding                the foregoing, a reduction or elimination of Executive’s benefits under                one or more benefit plans, programs or arrangements maintained as                part of                a good faith, overall reduction or elimination of such plans or benefits,                applicable to all participants in a manner that does not discriminate                against Executive (except as such discrimination may be necessary                to                comply with law), will not constitute an event of Good Reason or                a                material breach of this Agreement, provided that benefits of the                same type                or to the same general extent as those offered under such plans prior                to                the reduction or elimination are not available to other officers                of the                Company or any affiliate under a plan or plans in or under which                Executive                is not entitled to participate. |
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|   | g. | Continuing                Covenant Not to Compete or Interfere with Relationships.                Regardless of anything herein to the contrary, following a termination                by                the Company or Executive pursuant to Section 10(e) or                10(f): |
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|   | i. | Executive’s                obligations under Section 9(c) of this Agreement will continue in                effect;                and |
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|   | ii. | During                the period ending on the first anniversary of such termination, Executive                will not serve as an officer, director or employee of any bank holding                company, bank, savings association, savings and loan holding company,                mortgage company or other financial institution that offers products                or                services competing with those offered by the Company, the Bank or                their                affiliates from any office within thirty-five (35) miles from the                main                office or any branch of the Company, the Bank or their affiliates                and,                further, Executive will not interfere with the relationship of the                Company, the Bank or their affiliates and any of their employees,                agents,                or representatives. |
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|   | h. | To                the extent Executive is a member of the Board on the date of termination                of employment, Executive will resign from the Board immediately following                such termination of employment. Executive will be obligated to tender                this                resignation regardless of the method or manner of termination, and                such                resignation will not be conditioned upon any event or                payment. |
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**11.**
**Termination      in Connection with a Change in Control**
**.**

|   | a. | For                purposes of this Agreement, a “Change in Control” means any of the                following events: |
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|   | i. | Merger:                The Company merges into or consolidates with another entity, or merges                another corporation into the Company, and as a result, less than                a                majority of the combined voting power of the resulting corporation                immediately after the merger or consolidation is held by persons                who were                stockholders of the Company immediately before the merger or                consolidation; |
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|   | ii. | Acquisition                of Significant Share Ownership:                There is filed, or is required to be filed, a report on Schedule                13D or                another form or schedule (other than Schedule 13G) required under                Sections                13(d) or 14(d) of the Securities Exchange Act of 1934, as amended,                if the                schedule discloses that the filing person or persons acting in concert                has                or have become the beneficial owner of 25% or more of a class of                the                Company’s voting securities, but this clause (ii) shall not apply to                beneficial ownership of Company voting shares held in a fiduciary                capacity                by an entity of which the Company directly or indirectly beneficially                owns                50% or more of its outstanding voting                securities; |
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|   |   | iii. | Change                in Board Composition:                During any period of two consecutive years, individuals who constitute                the                Company’s Board of Directors at the beginning of the two-year period cease                for any reason to constitute at least a majority of the Company’s Board of                Directors; provided, however, that for purposes of this clause (iii),                each                director who is first elected by the board (or first nominated by                the                board for election by the members) by a vote of at least two-thirds                (2/3)                of the directors who were directors at the beginning of the two-year                period shall be deemed to have also been a director at the beginning                of                such period; or |
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|   |   |   |   |
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|   |   | iv. | Sale of Assets:              The Company sells to a third party all or substantially all of its              assets. |
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|   |   | Notwithstanding                anything in this Agreement to the contrary, in no event shall the                conversion of the Bank’s mutual holding company parent, Delanco MHC, from                mutual to stock form, i.e., a “second step conversion,” constitute a                “Change in Control” for purposes of this                Agreement. |
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|   | b. | Termination.                If within the period ending one year after a Change in Control, (i)                the                Company terminates Executive’s employment without Cause, or (ii) Executive                voluntarily terminates his employment With Good Reason, the Company                will,                within ten calendar days of the termination of Executive’s employment,                make a lump-sum cash payment to him equal to three times Executive’s                average taxable compensation (as reported on Form W-2) over the five                (5)                most recently completed calendar years (or years of employment, annualized                for partial years of employment, if less than five), ending with                the year                immediately preceding the effective date of the Change in Control.                The                cash payment made under this Section 11(b) shall be made in lieu                of any                payment also required under Section 10(f) of this Agreement because                of                Executive’s termination of employment; however, Executive’s rights under                Section 10(f) are not otherwise affected by this Section 11. Following                termination of employment, executive will also continue to participate                in                any benefit plans of the Company or the Bank that provide medical,                dental                and life insurance coverage upon terms no less favorable than the                most                favorable terms provided to senior executives. If the Company cannot                provide such coverage because Executive is no longer an employee,                the                Company will provide Executive with comparable coverage on an individual                basis or the cash equivalent. The medical, dental and life insurance                coverage provided under this Section 11(b) shall cease upon the earlier                of: (i) Executive’s death; (ii) Executive’s employment by another employer                other than one of which he is the majority owner; or (iii) thirty-six                (36)                months after his termination of                employment. |
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|   | c. | The                provisions of Section 11 and Sections 13 through 25, including the                defined                terms used in such sections, shall continue in effect until the later                of                the expiration of this Agreement or one year following a Change in                Control. |
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**12.**
**Indemnification      and Liability Insurance**
**.**

|   | a. | Indemnification.                The Company agrees to indemnify Executive (and his heirs, executors,                and                administrators), and to advance expenses related to this indemnification,                to the fullest extent permitted under applicable law and regulations                against any and all expenses and liabilities that Executive reasonably                incurs in connection with or arising out of any action, suit, or                proceeding in which he may be involved by reason of his service as                an                officer or director of the Company or any of its subsidiaries or                affiliates (whether or not he continues to be an officer or director                at                the time of incurring any such expenses or liabilities). Covered                expenses                and liabilities include, but are not limited to, judgments, court                costs,                and attorneys’ fees and the costs of reasonable settlements, subject to                Board approval, if the action is brought against Executive in his                capacity                as an officer or director of the Company or any of its subsidiaries                or                affiliates. Indemnification for expenses will not extend to matters                related to Executive’s termination for Cause. Notwithstanding anything in                this Section 12(a) to the contrary, the Company will not be required                to                provide indemnification prohibited by applicable law or regulation.                The                obligations of this Section 12 will survive the term of this Agreement                by                a period of six (6) years. |
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|   | b. | Insurance.                During the period for which the Company must indemnify Executive,                the                Company will provide Executive (and his heirs, executors, and                administrators) with coverage under a directors’ and officers’ liability                policy, at the Company’s expense, that is at least equivalent to the                coverage provided to directors and senior executives of the                Company. |
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**13.**
**Reimbursement      of Executive’s Expenses to Enforce this Agreement**
**.      **

**14.**
**Limitation      of Benefits Under Certain Circumstances**
**.      **

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**15.**
**Injunctive      Relief**
**.      **

**16.**
**Successors      and Assigns**
**.**

|   | a. | This                Agreement shall inure to the benefit of and be binding upon any corporate                or other successor of the Company which shall acquire, directly or                indirectly, by merger, consolidation, purchase or otherwise, all                or                substantially all of the assets or stock of the                Company. |
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|   | b. | Since                the Company is contracting for the unique and personal skills of                Executive, Executive shall not assign or delegate his rights or duties                under this Agreement without first obtaining the written consent                of the                Company. |
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**17.**
**No      Mitigation**
**.      **

**18.**
**Notices**
**.      **

**19.**
**No      Plan Created by this Agreement**
**.      **

**20.**
**Amendments**
**.**

**21.**
**Applicable      Law**
**.**

**22.**
**Severability**
**.      **

**23.**
**Headings**
**.**

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**24.**
**Entire      Agreement**
**.**

**25.**
**Source      of Payments**
**.**

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**IN      WITNESS WHEREOF,**

|         |                                                            |                                         |
|--------------|-----------------------------------------------------------------|----------------------------------------------|
| ATTEST:      | **DELANCO              BANCORP, INC.**                          |
|    |                                                       |                                    |
| Illegible    | By:                                                   | /s/              John              W. Seiber |
| Witness      | **For              the Entire Board of              Directors** |
|         |                                                                 |
|                               |                                                |                                   |
|------------------------------------|-----------------------------------------------------|----------------------------------------|
| WITNESS:                           | **EXECUTIVE**                                       |
|                          |                                           |                              |
| /s/              Robert M. Notigan | By:                                       | /s/              Douglas R. Allen, Jr. |
|                               | **Douglas              R. Allen,              Jr.** |

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