Exhibit
      10.5

    


    DELANCO
      FEDERAL SAVINGS BANK

    EMPLOYEE
      SEVERANCE COMPENSATION PLAN

    


    
      	
              A.

            	
              Purpose.

            


    

    


    The
      primary purpose of the Delanco Federal Savings Bank Employee Severance
      Compensation Plan (the “Plan”) is to ensure the successful continuation of the
      business of Delanco Federal Savings Bank (the “Bank”) and the fair and equitable
      treatment of the Bank’s employees following a Change in Control (as defined
      below). 

    


    
      	B.	
              Covered
                Employees.

            


    

    


    Subject
      to paragraph C below, any employee of the Bank with at least one year of service
      as of his or her termination date shall be eligible to receive a Change in
      Control Severance Benefit (as defined below) if, within the period beginning
      on
      the effective date of a Change in Control and ending on the first anniversary
      of
      such date, (i) the employee’s employment with the Bank is involuntarily
      terminated or (ii) the employee terminates employment with the Bank voluntarily
      after being offered continued employment in a position that is not a Comparable
      Position (as defined below). 

    


    
      	
              C.

            	
              Limitations
                on Eligibility for Change in Control Severance Benefits or Management
                Restructuring Benefits.

            


    

    


    
      	 	
              (1)

            	
              No
                employee shall be eligible for a Change in Control Severance Benefit
                if
                (a) his or her employment is terminated for “Cause,” (b) he or she is
                offered a Comparable Position and declines to accept such position,
                or (c)
                the employee is, at the time of termination of employment, a party
                to an
                individual employment agreement or change in control agreement with
                the
                Bank and/or Delanco Bancorp, Inc. (the “Company).
                

            


    

    


    
      	
            	(2)	
              For
                purposes of this Plan, a termination of employment for “Cause” shall
                include termination because of the employee's personal dishonesty,
                incompetence, willful misconduct, breach of fiduciary duty involving
                personal profit, intentional failure to perform stated duties, willful
                violation of any law, rule, or regulation (other than traffic violations
                or similar offenses) or final cease-and-desist order, or material
                breach
                of any provision of the Plan.

            


    

    


    
      	 	
              (3)

            	
              For
                purposes of this Plan, a “Comparable Position” shall mean a position that
                would (a) provide the employee with base compensation and benefits
                that are comparable in the aggregate to those provided to the employee
                prior to the Change in Control; (b) provide the employee with an
                opportunity for variable bonus compensation that is comparable to
                the
                opportunity provided to the employee prior to the Change in Control;
                (c)
                be in a location that would not require the employee to increase
                his or
                her daily one way commuting distance by more than thirty-five (35)
                miles
                as compared to the employee’s commuting distance immediately prior to the
                Change in Control; and (d) have job skill requirements and duties
                that are
                comparable to the requirements and duties of the position held by
                the
                employee prior to the Change in
                Control.

            


    

     

     

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

     

    D. Definitions
      of Change in Control.

    


    For
      purposes of this Plan, “Change in Control” means the occurrence of any one of
      the following events:

    


    
      	 	
              (1)

            	
              Merger:
                The Company merges into or consolidates with another corporation,
                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.

            


    

    


    
      	 	
              (2)

            	
              Acquisition
                of Significant Share Ownership:
                A
                report on Schedule 13D or another form or schedule (other than Schedule
                13G) is filed or required to be filed under Sections 13(d) or 14(d)
                of the
                Securities Exchange Act of 1934, if the schedule discloses that the
                filing
                person or persons acting in concert has or have become the beneficial
                owner(s) of 25% or more of a class of the Company’s voting securities, but
                this clause (2) 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.

            


    

    


    
      	 	
              (3)

            	
              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 (3),
                each
                director who is first elected by the board (or first nominated by
                the
                board for election by the stockholders) 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

            


    

    


    
      	 	
              (4)

            	
              Sale
                of Assets:
                The Company or the Bank sells to a third party all or substantially
                all of
                its assets.

            


    

    


    Notwithstanding
      anything in this Plan 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 Plan.

    


    E. Determination
      of the Change in Control Severance Benefit.

    


    
      	 	
              (1)

            	
              The
                Change in Control Severance Benefit payable to an eligible employee
                under
                this Plan shall be determined under the following
                schedule:

            


    

    


    
      	 	
              (a)

            	
              An
                eligible employee who does not receive a benefit pursuant to paragraph
                (b)
                of this Section shall receive a Change in Control Severance Benefit
                equal
                to the product of (i) the employee’s years of service from his or her hire
                date (including partial years) through the termination date and (ii)
                an
                amount equal to two (2) weeks of the employee’s Base Compensation (as
                defined below). A “year of service” shall mean each 12-month period of
                service following an employee’s hire date determined without regard the
                number of hours worked during such period(s). The minimum payment
                to an
                eligible employee under this paragraph shall be an amount equal to
                two (2)
                weeks of Base Compensation and the maximum payment to an eligible
                employee
                shall be an amount equal to six (6) months of Base
                Compensation.

            


    

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

     

    
      	 	
              (b)

            	
              An
                eligible employee who held the title of Vice President or higher
                immediately prior to a Change in Control shall receive a Change in
                Control
                Severance Benefit equal to twelve (12) months of Base Compensation.
                

            


    

    


    
      	 	
              (c)

            	
              The
                Change in Control Severance Benefit shall be paid in a lump sum not
                later
                than five (5) business days after the date of the employee’s termination
                of employment.

            


    

    


    
      	 	
              (2)

            	
              For
                purpose of determinations under this paragraph E, “Base Compensation”
                shall mean: 

            


    

    


    
      	 	
              (a)

            	
              For
                salaried employees, the employee’s annual base salary at the rate in
                effect on his or her termination date or, if greater, the rate in
                effect
                on the date immediately preceding the Change in
                Control.

            


    

    


    
      	 	
              (b)

            	
              For
                employees whose compensation is determined in whole or in part on
                the
                basis of commission income, the employee’s base salary at termination (or,
                if greater, the employee’s base salary on the date immediately preceding
                the effective date of the Change in Control), if any, plus the commissions
                earned by the employee in the twelve (12) full calendar months preceding
                his or her termination date (or, if greater, the commissions earned
                in the
                twelve (12) full calendar months immediately preceding the effective
                date
                of the Change in Control).

            


    

    


    
      	 	
              (c)

            	
              For
                hourly employees, the employee’s total hourly wages for the twelve (12)
                full calendar months preceding his or her termination date or, if
                greater,
                the twelve (12) full calendar months preceding the effective date
                of the
                Change in Control.

            


    

    


    
      	F.	
              Withholding.

            


    

    


    All
      payments will be subject to customary withholding for federal, state and local
      tax purposes.

    


    
      	G.	
              Parachute
                Payment.

            


    

    


    Notwithstanding
      anything in this Plan to the contrary, if a Change in Control Severance Benefit
      to an employee who is a “Disqualified Individual” shall be in an amount which
      includes an “Excess Parachute Payment,” taking into account payments under this
      Plan and otherwise, the benefit payable under this Plan shall be reduced to
      the
      maximum amount which does not include an Excess Parachute Payment. The terms
      “Disqualified Individual” and “Excess Parachute Payment” shall have the same
      meanings as under Section 280G of the Internal Revenue Code of 1986, as amended,
      or any successor provision thereto.

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

     

    
      	H.	
              Adoption
                by Affiliates.

            


    

    


    Upon
      approval by the Board of Directors of the Bank (the “Board”), this Plan may be
      adopted by any “Subsidiary” or “Parent” of the Bank. Upon such adoption, the
      provisions of the Plan shall be fully applicable to the employees of that
      Subsidiary or Parent. The term “Subsidiary” means any corporation in which the
      Bank, directly or indirectly, holds a majority of the voting power of its
      outstanding shares of capital stock. The term “Parent” means any corporation
      which holds a majority of the voting power of the Bank’s outstanding shares of
      capital stock.

    


    
      	I.	
              Administration.

            


    

    


    The
      Plan
      is administered by the Board, which shall have the discretion to interpret
      the
      terms of the Plan and to make all determinations about eligibility and payment
      of benefits. All decisions of the Board, any action taken by the Board with
      respect to the Plan and within the powers granted to the Board under the Plan,
      and any interpretation by the Board of any term or condition of the Plan, are
      conclusive and binding on all persons, and will be given the maximum possible
      deference allowed by law. The Board may delegate and reallocate any authority
      and responsibility with respect to the Plan.

    


    
      	J.	
              Source
                of Payments.

            


    

    


    Unless
      otherwise determined by the Board, all payments and benefits provided under
      this
      Agreement shall be paid solely by the Bank. Notwithstanding anything in this
      Agreement to the contrary, no provision of this Agreement shall be construed
      so
      as to result in the duplication of any payment or benefit. 

    


    
      	K.	
              Inalienability.

            


    

    


    In
      no
      event may any Employee sell, transfer, anticipate, assign or otherwise dispose
      of any right or interest under the Plan. At no time will any such right or
      interest be subject to the claims of creditors, nor liable to attachment,
      execution or other legal process.

    


    
      	L.	
              Governing
                Law.

            


    

    


    The
      provisions of the Plan will be construed, administered and enforced in
      accordance with the laws of the State of New Jersey, except to the extent that
      federal law applies.

    


    
      	M.	
              Severability.

            


    

    


    If
      any
      provision of the Plan is held invalid or unenforceable, its invalidity or
      unenforceability will not affect any other provision of the Plan, and the Plan
      will be construed and enforced as if such provision had not been
      included.

    


    
      	N.	
              No
                Employment Rights.

            


    

    


    Neither
      the establishment nor the terms of this Plan shall be held or construed to
      confer upon any employee the right to a continuation of employment by the Bank,
      nor constitute a contract of employment, express or implied. The Bank reserves
      the right to dismiss or otherwise deal with any employee to the same extent
      and
      on the same basis as though this Plan had not been adopted. Nothing in this
      Plan
      is intended to alter the at-will status of the Bank’s employees, it being
      understood that, except to the extent otherwise expressly set forth to the
      contrary in an individual employment-related agreement, the employment of any
      employee may be terminated at any time by either the Bank or the employee with
      or without cause.

     

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

     

    
      	O.	
              Amendment
                and Termination.

            


    

    


    The
      Plan
      may be terminated or amended in any respect by resolution adopted by a majority
      of the Board, unless a Change in Control has previously occurred. If a Change
      in
      Control occurs, the Plan no longer shall be subject to amendment, change,
      substitution, deletion, revocation or termination in any respect whatsoever.
      The
      form of any proper amendment or termination of the Plan shall be a written
      instrument signed by a duly authorized officer or officers of the Bank,
      certifying that the amendment or termination has been approved by the Board.
      A
      proper amendment of the Plan automatically shall effect a corresponding
      amendment to each Participant’s rights hereunder. A proper termination of the
      Plan automatically shall effect a termination of all employees’ rights and
      benefits hereunder.

    


    
      	P.	
              Required
                Provisions.

            


    

    


    
      	 	
              (1)

            	
              In
                the event any of the provisions of this Section P are in conflict
                with the
                terms of this Plan, this Section P shall
                prevail.

            


    

    


    
      	 	
              (2)

            	
              The
                Bank’s Board of Directors may terminate an employee’s employment at any
                time, but any termination by the Bank, other than termination for
                Cause,
                shall not prejudice an employee’s right to compensation or other benefits
                under this Plan. An employee shall not have the right to receive
                compensation or other benefits for any period after Termination for
                Cause.

            


    

    


    
      	 	
              (3)

            	
              If
                an employee is suspended from office and/or temporarily prohibited
                from
                participating in the conduct of the Bank’s affairs by a notice served
                under Section 8(e)(3) or 8(g)(1) of the Federal Deposit Insurance
                Act, 12
                U.S.C. §1818(e)(3) or (g)(1); the Bank’s obligations under this Plan shall
                be suspended as of the date of service, unless stayed by appropriate
                proceedings. If the charges in the notice are dismissed, the Bank
                may in
                its discretion: (i) pay the employee all or part of the compensation
                withheld while their contract obligations were suspended; and (ii)
                reinstate (in whole or in part) any of the obligations which were
                suspended.

            


    

    


    
      	 	
              (4)

            	
              If
                an employee is removed and/or permanently prohibited from participating
                in
                the conduct of the Bank’s affairs by an order issued under Section 8(e)(4)
                or 8(g)(1) of the Federal Deposit Insurance Act, 12 U.S.C. §1818(e)(4) or
                (g)(1), all obligations of the Bank under this Plan shall terminate
                as of
                the effective date of the order, but vested rights of the contracting
                parties shall not be affected.

            


    

    


    
      	 	
              (5)

            	
              If
                the Bank is in default as defined in Section 3(x)(1) of the Federal
                Deposit Insurance Act, 12 U.S.C. §1813(x)(1) all obligations under this
                Plan shall terminate as of the date of default, but this paragraph
                shall
                not affect any vested rights of the contracting
                parties.

            


    

    


    
      	 	
              (6)

            	
              All
                obligations under this Plan shall be terminated, except to the extent
                determined that continuation of the Plan is necessary for the continued
                operation of the Bank: (i) by the Director of the Office of Thrift
                Supervision (OTS), or his designee, at the time the Federal Deposit
                Insurance Corpporation (FDIC) enters into an agreement to provide
                assistance to or on behalf of the Bank under the authority contained
                in
                Section 13(c) of the Federal Deposit Insurance Act, 12 U.S.C. §1823(c); or
                (ii) by the Director of the OTS (or his designee) at the time the
                Director
                (or his designee) approves a supervisory merger to resolve problems
                related to the operations of the Bank or when the Bank is determined
                by
                the Director to be in an unsafe or unsound condition. Any rights
                of the
                parties that have already vested, however, shall not be affected
                by such
                action.

            


    

     

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

     

    
      	 	
              (7)

            	
              Any
                payments made to employees pursuant to this Plan, or otherwise, are
                subject to and conditioned upon their compliance with 12 U.S.C. §1828(k)
                and FDIC regulation 12 C.F.R. Part 359, Golden Parachute and
                Indemnification Payments.

            


    

     

    This
      plan
      has been approved and adopted by the Board of Directors of the Bank and is
      effective as of March 30, 2007.

     

    
      	 	 	 
	 	DELANCO
              FEDERAL SAVINGS BANK
	 
 	 
 	 
 
	Attest:    /s/ Robert M.
              Notigan 	By:  	/s/ 
John
              W.
              Seiber
	
              
                

              

            	
              
For
              the Entire Board of Directors 
	 	
            




    
      
         

      

      
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