Unassociated Document


    Exhibit
      10.4

    


    DELANCO
      FEDERAL SAVINGS BANK

    EMPLOYMENT
      AGREEMENT

    


    THIS
      AGREEMENT
      (the
“Agreement”), made this 30th
      day of
      March, 2007, by and between DELANCO
      FEDERAL SAVINGS BANK,
      a
      federally chartered savings bank (the “Bank”), and
      DOUGLAS R. ALLEN, JR. (the
      “Executive”).

    


    WHEREAS,
      Executive
      serves in a position of substantial responsibility; and

    


    WHEREAS,
      the
      Bank
      wishes to assure Executive’s services for the term of this Agreement;
      and

    


    WHEREAS,
      Executive
      is willing to serve in the employ of the Bank during the term of this
      Agreement.

    


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

    


    1. Employment.
      The
      Bank
      will employ Executive as Senior Vice President, Treasurer and Chief Financial
      Officer until October 1, 2007. After that time, Executive shall remain employed
      as President and Chief Executive Officer. Executive will perform all duties
      and
      shall have all powers commonly incident to his positions, or which, consistent
      with those positions, the Board of Directors of the Bank (the “Board”) delegates
      to Executive. Executive also agrees to serve, if elected, as an officer and/or
      director of any subsidiary or affiliate of the Bank and to carry out the duties
      and responsibilities reasonably appropriate to those offices. 

    


    2. Location
      and Facilities.
      The Bank
      will furnish Executive with the working facilities and staff customary for
      executive officers with the titles and duties set forth in Section 1 and as
      are
      necessary for him to perform his duties. The location of such facilities and
      staff shall be at the principal administrative offices of the Bank, or at such
      other site or sites customary for such offices.

    


    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.
                

            


    

    


    
      	 	
              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.

            


    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    4. Base
      Compensation.
      

    


    
      	 	
              a.

            	
              For
                his services as Senior Vice President, Treasurer and Chief Financial
                Officer, the Bank 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.

            


    

    


    
      	 	
              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.

            


    

    


    5. Bonuses.
      Executive will participate in discretionary bonuses or other incentive
      compensation programs that the Bank may sponsor for or award from time to time
      to senior management employees.

    


    6. Benefit
      Plans.
      Executive will participate in life insurance, medical, dental, pension, profit
      sharing, retirement and stock-based compensation plans and other programs and
      arrangements that the Bank may sponsor or maintain for the benefit of its
      employees.

    


    7.
       Vacations
      and Leave.

    


    
      	 	
              a.

            	
              Executive
                may take vacations and other leave in accordance with the Bank’s policy
                for senior executives, or otherwise as approved by the
                Board.

            


    

    


    
      	 	
              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.

            


    

    


    8. Expense
      Payments and Reimbursements.
      The
      Bank
      will reimburse Executive for all reasonable out-of-pocket business expenses
      incurred in connection with his services under this Agreement upon
      substantiation of such expenses in accordance with applicable policies of the
      Bank.

    


    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 Bank 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 Bank or any of its
                subsidiaries or affiliates.

            


    

    


    
      	 	
              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 Bank, or, solely as a passive,
                minority investor, in any business.

            


    

    


    
      	 	
              c.
                

            	
              Executive
                agrees to maintain the confidentiality of any and all information
                concerning the operations or financial status of the Bank; the names
                or
                addresses of any of its borrowers, depositors and other customers;
                any
                information concerning or obtained from such customers; and any other
                information concerning the Bank or its subsidiaries or 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
                Bank.

            


    

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    10. Termination
      and Termination Pay.
      Subject
      to Section 11 of this Agreement, Executive’s employment under this Agreement may
      be terminated in the following circumstances:

    


    
      	 	
              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.

            


    

    


    
      	 	
              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.

            


    

    


    
      	
            	c.	
              Disability.

            


    

    


    
      	 	
              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 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.

            


    

    


    
      	 	
              ii.

            	
              In
                the event of his Disability, Executive will no longer be obligated
                to
                perform services under this Agreement. The Bank 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 Bank 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 at the Bank 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 Bank
                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 Bank. In addition, during any period of
                Executive’s Disability, the Bank 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
                Bank.

            


    

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    
      	
            	d.	
              Termination
                for Cause.

            


    

    


    
      	 	
              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:
                

            


    

    


    
      	 	
              (1)

            	
              Personal
                dishonesty;

            


    

    


    
      	 	
              (2)

            	
              Incompetence;

            


    

    


    
      	 	
              (3)

            	
              Willful
                misconduct;

            


    

    


    
      	 	
              (4)

            	
              Breach
                of fiduciary duty involving personal
                profit;

            


    

    


    
      	 	
              (5)

            	
              Intentional
                failure to perform stated duties;

            


    

    


    
      	 	
              (6)

            	
              Willful
                violation of any law, rule or regulation (other than traffic violations
                or
                similar offenses) or final cease-and-desist order;
                or

            


    

    


    
      	 	
              (7)

            	
              Material
                breach of any provision of this
                Agreement.

            


    

    


    
      	 	
              ii.

            	
              Notwithstanding
                the foregoing, Executive’s termination for Cause will not become effective
                unless the Bank 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.

            


    

    


    
      	 	
              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. 

            


    

    


    
      	 	
              f.

            	
              Without
                Cause or With Good Reason.

            


    

    


    
      	 	
              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”).

            


    

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    
      	 	
              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
                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 of the Bank during the same period. If the Bank cannot
                provide
                such coverage because Executive is no longer an employee, the Bank
                will
                provide Executive with comparable coverage on an individual policy
                basis
                or the cash equivalent.

            


    

    


    
      	 	
              iii.

            	
              “Good
                Reason” exists if, without Executive’s express written consent, the Bank
                materially breaches any of its obligations under this Agreement.
                Without
                limitation, such a material breach will occur upon any of the
                following:

            


    

    


    
      	 	
              (1)

            	
              A
                material reduction in Executive’s responsibilities or authority in
                connection with his employment with the
                Bank;

            


    

    


    
      	 	
              (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;

            


    

    


    
      	 	
              (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;
                

            


    

    


    
      	 	
              (4)

            	
              A
                reduction in salary or benefits contrary to the terms 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;

            


    

    


    
      	 	
              (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;
                

            


    

    


    
      	 	
              (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 Bank, or the assignment to Executive of duties that would
                reasonably require such a relocation;
                or

            


    

    


    
      	
            	(7)	
              Liquidation
                or dissolution of the Bank.

            


    

    


    
      	 	
              iv.

            	
              Notwithstanding
                the foregoing, a reduction or elimination of Executive’s benefits under
                one or more benefit plans, programs or arrangements maintained by
                the Bank
                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
                Bank or any affiliate under a plan or plans in or under which Executive
                is
                not entitled to participate.

            


    

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    
      	 	
              g.

            	
              Continuing
                Covenant Not to Compete or Interfere with Relationships.
                Regardless of anything herein to the contrary, following a termination
                by
                the Bank or Executive pursuant to Section 10(e) or
                10(f):

            


    

    


    
      	 	
              i.

            	
              Executive’s
                obligations under Section 9(c) of this Agreement will continue in
                effect;
                and

            


    

    


    
      	 	
              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 Bank from any office
                within
                thirty-five (35) miles from the main office or any branch of the
                Bank and,
                further, Executive will not interfere with the relationship of the
                Bank,
                its subsidiaries or affiliates and any of their employees, agents,
                or
                representatives. 

            


    

    


    
      	 	
              h.

            	
              To
                the extent Executive is a member of the Board on the date of termination
                of employment with the Bank, Executive will resign from the Board
                immediately following such termination of employment with the Bank.
                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.

            


    

    


    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:

            


    

    


    
      	 	
              i.

            	
              Merger:
                Delanco Bancorp, Inc. (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;

            


    

    


    
      	 	
              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;

            


    

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    
      
        	 	
                
                  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

                

              


      

       

      
        
          	 	
                  iv.

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

                


        

         

      

    

    
      	 	
            	
              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.

            


    

    


    
      	 	
              b.

            	
              Termination.
                If within the period ending one year after a Change in Control, (i)
                the
                Bank terminates Executive’s employment without Cause, or (ii) Executive
                voluntarily terminates his employment With Good Reason, the Bank
                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, 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 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
                Bank
                cannot provide such coverage because Executive is no longer an employee,
                the Bank 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.

            


    

    


    
      	 	
              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.

            


    

    


    12. Indemnification
      and Liability Insurance.

    


    
      	 	
              a.

            	
              Indemnification.
                The Bank 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 Bank 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 Bank or any of its subsidiaries.
                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 Bank 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.

            


    

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    
      	 	
              b.

            	
              Insurance.
                During the period for which the Bank must indemnify Executive, the
                Bank
                will provide Executive (and his heirs, executors, and administrators)
                with
                coverage under a directors’ and officers’ liability policy at the Bank’s
                expense, that is at least equivalent to the coverage provided to
                directors
                and senior executives of the Bank.

            


    

    


    13. Reimbursement
      of Executive’s Expenses to Enforce this Agreement.
      The
      Bank
      will reimburse Executive for all out-of-pocket expenses, including, without
      limitation, reasonable attorneys’ fees, incurred by Executive in connection with
      his successful enforcement of the Bank’s obligations under this Agreement.
      Successful enforcement means the grant of an award of money or the requirement
      that the Bank take some specified action: (i) as a result of court order; or
      (ii) otherwise following an initial failure of the Bank to pay money or take
      action promptly following receipt of a written demand from Executive stating
      the
      reason that the Bank must make payment or take action under this
      Agreement.

    


    14. Limitation
      of Benefits Under Certain Circumstances.
      If
      the
      payments and benefits pursuant to Section 11 of this Agreement, either alone
      or
      together with other payments and benefits Executive has the right to receive
      from the Bank, would constitute a “parachute payment” under Section 280G of the
      Internal Revenue Code of 1986, as amended (the “Code”), the payments and
      benefits pursuant to Section 11 shall be reduced or revised, in the manner
      determined by Executive, by the amount, if any, which is the minimum necessary
      to result in no portion of the payments and benefits under Section 11 being
      non-deductible to the Bank pursuant to Section 280G of the Code and subject
      to
      the excise tax imposed under Section 4999 of the Code. The Bank’s independent
      public accountants will determine any reduction in the payments and benefits
      to
      be made pursuant to Section 11; the Bank will pay for the accountant’s opinion.
      If the Bank and/or Executive do not agree with the accountant’s opinion, the
      Bank will pay to Executive the maximum amount of payments and benefits pursuant
      to Section 11, as selected by Executive, that the opinion indicates have a
      high
      probability of not causing any of the payments and benefits to be non-deductible
      to the Bank and subject to the excise tax imposed under Section 4999 of the
      Code. The Bank may also request, and Executive has the right to demand that
      the
      Bank request, a ruling from the IRS as to whether the disputed payments and
      benefits pursuant to Section 11 have such tax consequences. The Bank will
      promptly prepare and file the request for a ruling from the IRS, but in no
      event
      will the Bank make this filing later than thirty (30) days from the date of
      the
      accountant’s opinion referred to above. The request will be subject to
      Executive’s approval prior to filing; Executive shall not unreasonably withhold
      his approval. The Bank and Executive agree to be bound by any ruling received
      from the IRS and to make appropriate payments to each other to reflect any
      IRS
      rulings, together with interest at the applicable federal rate provided for
      in
      Section 7872(f)(2) of the Code. Nothing contained in this Agreement shall result
      in a reduction of any payments or benefits to which Executive may be entitled
      upon termination of employment other than pursuant to Section 11 hereof, or
      a
      reduction in the payments and benefits specified in Section 11, below
      zero.

    


    15. Injunctive
      Relief.
      Upon
      a
      breach or threatened breach of Section 10(g) of this Agreement or the
      prohibitions upon disclosure contained in Section 9(c) of this Agreement, the
      parties agree that there is no adequate remedy at law for such breach, and
      the
      Bank shall be entitled to injunctive relief restraining Executive from such
      breach or threatened breach, but such relief shall not be the exclusive remedy
      for a breach of this Agreement. The parties further agree that Executive,
      without limitation, may seek injunctive relief to enforce the obligations of
      the
      Bank under this Agreement.

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    16. Successors
      and Assigns.

    


    
      	 	
              a.

            	
              This
                Agreement shall inure to the benefit of and be binding upon any corporate
                or other successor of the Bank which shall acquire, directly or
                indirectly, by merger, consolidation, purchase or otherwise, all
                or
                substantially all of the assets or stock of the
                Bank.

            


    

    


    
      	 	
              b.

            	
              Since
                the Bank 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
                Bank.

            


    

    


    17. No
      Mitigation.
      Executive
      shall not be required to mitigate the amount of any payment provided for in
      this
      Agreement by seeking other employment or otherwise and no such payment shall
      be
      offset or reduced by the amount of any compensation or benefits provided to
      Executive in any subsequent employment.

    


    18. Notices.
      All
      notices, requests, demands and other communications in connection with this
      Agreement shall be made in writing and shall be deemed to have been given when
      delivered by hand or 48 hours after mailing at any general or branch United
      States Post Office, by registered or certified mail, postage prepaid, addressed
      to the Bank at its principal business office and to Executive at his home
      address as maintained in the records of the Bank.

    


    19. No
      Plan Created by this Agreement.
      Executive
      and the Bank expressly declare and agree that this Agreement was negotiated
      among them and that no provision or provisions of this Agreement are intended
      to, or shall be deemed to, create any plan for purposes of the Employee
      Retirement Income Security Act of 1974 (“ERISA”) or any other law or regulation,
      and each party expressly waives any right to assert the contrary. Any assertion
      in any judicial or administrative filing, hearing, or process that an ERISA
      plan
      was created by this Agreement shall be deemed a material breach of this
      Agreement by the party making the assertion.

    


    20. Amendments.
      No
      amendments or additions to this Agreement shall be binding unless made in
      writing and signed by all of the parties, except as herein otherwise
      specifically provided.

    


    21. Applicable
      Law.
      Except
      to the extent preempted by federal law, the laws of the State of New Jersey
      shall govern this Agreement in all respects, whether as to its validity,
      construction, capacity, performance or otherwise.

    


    22. Severability.
      The
      provisions of this Agreement shall be deemed severable and the invalidity or
      unenforceability of any one provision shall not affect the validity or
      enforceability of the other provisions of this Agreement.

    


    23. Headings.
      Headings
      contained in this Agreement are for convenience of reference only.

    


    24. Entire
      Agreement.
      This
      Agreement, together with any modifications subsequently agreed to in writing
      by
      the parties, shall constitute the entire agreement among the parties with
      respect to the foregoing subject matter, other than written agreements
      applicable to specific plans, programs or arrangements described in Sections
      5
      and 6. 

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    25. Required
      Provisions.
      In the
      event any of the foregoing provisions of this Agreement conflict with the terms
      of this Section 25, this Section 25 shall prevail.

    


    
      	
            	a.	
              The
                Bank’s Board of Directors may terminate Executive’s employment at any
                time, but any termination by the Bank, other than termination for
                Cause,
                shall not prejudice Executive’s right to compensation or other benefits
                under this Agreement. Executive shall not have the right to receive
                compensation or other benefits for any period after termination for
                Cause
                as defined in Section 10(d) of this
                Agreement.

            


    

    


    
      	 	
              b.

            	
              If
                Executive 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. Section 1818(e)(3) or (g)(1), the 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,
                the
                Bank may, in its discretion: (i) pay Executive all or part of the
                compensation withheld while its contract obligations were suspended;
                and
                (ii) reinstate (in whole or in part) any of the obligations which
                were
                suspended.

            


    

    


    
      	 	
              c.

            	
              If
                Executive 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. Section
                1818(e)(4) or (g)(1), all obligations of the Bank under this Agreement
                shall terminate as of the effective date of the order, but vested
                rights
                of the contracting parties shall not be
                affected.

            


    

    


    
      	 	
              d.

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

            


    

    


    
      	 	
              e.

            	
              All
                obligations under this Agreement shall terminate, except to the extent
                determined that continuation of the Agreement is necessary for the
                continued operation of the institution: (i) by the Director of the
                Office
                of Thrift Supervision (OTS), or his designee, at the time the Federal
                Deposit Insurance Corporation (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. Section
                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.

            


    

    


    
      	
            	f.	
              Any
                payments made to Executive pursuant to this Agreement, or otherwise,
                are
                subject to and conditioned upon their compliance with 12 U.S.C. Section
                1828(k) and FDIC Regulation 12 C.F.R. Part 359, Golden Parachute
                and
                Indemnification Payments.

            


    

    


    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

    


    IN
      WITNESS WHEREOF,
      the
      parties hereto have executed this Agreement as of the date first written
      above.

    


    
      	 	 	 
	ATTEST:	DELANCO
              FEDERAL SAVINGS BANK
	 
 	 
 	 
 
	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.


    

     

    
      
        
        

      

      
        11