Exhibit 10.3
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     This is an  EMPLOYMENT  AGREEMENT  (the  "Agreement"),  dated as of July 1,
2001, by and between KENT FINANCIAL SERVICES,  INC., a Delaware corporation (the
"Company"), and John W. Galuchie, Jr. (the "Executive").


                                    Recitals
                                    --------

     The Executive  currently serves as Executive Vice President of the Company.
The  Company  desires  the  Executive  to  continue  to serve  as the  Company's
Executive  Vice  President,  and the Executive  desires to continue to serve the
Company as its Executive Vice  President,  on the terms and conditions set forth
in this Agreement.

     NOW, THEREFORE, the parties agree as follows:

     1.  Employment.  The Company hereby employs the Executive as Executive Vice
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President of the Company, and the Executive hereby accepts such employment, upon
the terms and conditions set forth herein.

     2. Duties and Powers.
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     2.1 Duties.  The Executive  shall serve as Executive  Vice President of the
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Company and perform the duties of  Executive  Vice  President  as defined in the
Bylaws of the  Company in effect on the date of this  Agreement.  The  Executive
Vice President shall receive the  compensation  provided herein  notwithstanding
any future amendment to the Bylaws of the Company which diminishes or alters the
duties of the Executive Vice President of the Company.  The Executive  shall not
be required to devote his entire  working  time to the  business of the Company,
and may devote time to other  business  interests,  including  directorships  of
other companies public and private.

     2.2  Service as  Director.  If  elected,  the  Executive  shall  serve as a
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director  of the Company  without  additional  compensation,  and shall have the
right at any time to serve as a director of any subsidiary of the Company.

     3. Term of Agreement.  The initial term of employment  under this Agreement
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shall be three years  commencing  effective  as of July 1, 2001 (the  "Effective
Date") and shall extend until June 30, 2004 unless sooner terminated pursuant to
Section 6 below.  The term of the  Executive's  employment  under this Agreement
shall be automatically extended one day for each day elapsed after the Effective
Date.  Employment of the  Executive by the Company  prior to the Effective  Date
shall, subject to the terms and conditions of the benefit plans and arrangements
referred  to in Section 5.1 below,  be counted in  determining  the  Executive's
continuous service with the Company for purposes of any benefit computation.

     4.  Compensation.  For all services  rendered by the  Executive  under this
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Agreement, the Company shall pay the Executive an annual salary of $190,000 (the
"Base  Salary"),  payable  in  equal  semi-monthly  installments.  The  Board of
Directors of the Company shall from time to time review the  compensation  to be
paid to the Executive under this Agreement and shall increase (but not decrease)
the compensation in such amounts, if any, as the Board of Directors determines.

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     5. Benefits, Expenses, Reimbursement, etc.
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     5.1 Benefit  Plans.  The Company  shall  provide  the  Executive  with such
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medical and disability  insurance,  hospital  insurance and group life insurance
and other benefits made available to executive  level  employees of the Company,
subject to the terms and conditions of such benefit plans and arrangements.

     5.2 Expenses.  The Company shall pay all expenses incurred by the Executive
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in  furtherance  of or in  connection  with the  business of the Company and its
subsidiaries and affiliates  including,  without limitation,  all (i) travel and
living  expenses  while away from home on  business or at the request and in the
service of the Company or its  subsidiary or affiliate,  and (ii)  entertainment
expenses,  upon submission of appropriate receipts or vouchers and in accordance
with the  standard  expense  reimbursement  policies of the Company as in effect
from time to time. If any such expenses are paid by the  Executive,  the Company
shall  reimburse him promptly for those  expenses.  The Executive  shall also be
entitled  to  reimbursement  for the  annual  fee(s)  of any  credit  cards  the
Executive acquires for use in charging  expenditures incurred in the performance
of his duties under this Agreement.

     5.3 Vacations.  The Executive  shall be entitled each year to a vacation of
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four weeks (twenty working days),  during which time his  compensation  shall be
paid in full and such holidays and other non-working days as are consistent with
the policies of the Company for  executives  generally.  All vacations  shall be
scheduled  so as to  cause  minimal  interference  with  the  operations  of the
Company.  If the  Executive's  employment  under this  Agreement  is  terminated
pursuant  to Section  6, the  Executive  shall be  entitled  to payment  for all
untaken vacation days.

     5.4 Death Benefits.  In the event of the Executive's  death during the term
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of this Agreement or thereafter during the period of any disability described in
Section 5.5C, the Company shall pay to such beneficiaries as the Executive shall
designate in writing prior to the Executive's death, or if he fails to designate
a beneficiary, to the Executive's spouse or, if none, to the Executive's estate,
an annual benefit equal to three times the  Executive's  Base Salary (the "Death
Benefit").  The Death Benefit shall be payable in equal monthly installments for
a period of 3 years, commencing on the first day of the next month following the
month in which the  Executive's  death  occurs.  Payments  made pursuant to this
Section  5.4  shall  be made in lieu  of any and all  payments  provided  for in
Section 4 of this Agreement.

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     5.5 Disability.
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         A.  The  Executive  shall be paid such benefits to which he is entitled
under  the  terms  of  such  long-term  disability  insurance   as  the  Company
has provided under Section 5.1 of this Agreement. However, if at any time during
the term of this Agreement (i) the Company is not providing  the Executive  with
long-term disability insurance coverage, or (ii) the amount of coverage provided
pays benefits less than an annual benefit of 70% of the Executive's Base Salary,
which the  Executive  is being  paid  prior to the  commencement  of  disability
benefits,  or (iii) fails to pay benefits to age 65, and the  Executive  suffers
from a Condition  (defined  below),  then the Executive shall be paid the amount
specified in Section 5.5B of this Agreement.

         B. If  during the  term of this  Agreement  (i) the  Executive shall be
deemed  disabled  and  unable to perform his duties  hereunder  by an  insurance
company  under  any  disability  insurance  policy  covering the Executive, (ii)
the Executive suffers  any  illness,  disability  or  incapacity  which  renders
him unable to perform  his duties  hereunder  and such  illness,  disability  or
incapacity is deemed  by a duly licensed physician (who may be  the  Executive's
personal physician) to be permanent,  or (iii) the Executive is unable to render
services to the  Company of the nature  required  by this  Agreement  because of
illness, disability or incapacity  for a period of 90 days,  whether or not such
days  are  consecutive, during any year of the  term hereof  (each of the events
described in paragraphs (i),(ii) and(iii) above being defined as a "Condition"),
then the Executive shall continue to use his best efforts to render advisory and
consulting  services  as he is able and as may be  reasonably  requested  by the
Company and the Company shall pay to the Executive  disability payments equal to
the  difference,  if any,  between  70% of the  Executive's  Base Salary and the
amount the Executive actually receives under the Company's long-term  disability
insurance  policy.  The  disability  payments  shall be paid to the Executive in
equal monthly  installments until the Executive attains age 65. The total amount
payable to the  Executive  under  this  section  5.5B  shall be the  "Disability
Benefit." Such payments  shall commence on the first day of the month  following
the month in which the Condition  occurs and shall be made even if the Executive
is unable to render any services to the Company.  Such payments shall be paid in
lieu of any and all compensation provided for in Section 4 of this Agreement.

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         C. In the  event of the Executive's death at any time during the period
in which payments in respect of the Disability Benefit  are  required to be paid
pursuant to Sections  5.5A and 5.5B above,  the Company  shall cease  paying any
such payments and shall pay the Death Benefit provided in Section 5.4.

     6. Termination. The Executive's employment hereunder may be terminated only
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under the following circumstances:

     6.1 Cause. The Company may terminate the Executive's  employment  hereunder
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for  "cause"  upon  not  less  than  five  days  prior  written  notice  of such
termination.  For purposes of this Agreement,  the Company shall have "cause" to
terminate the Executive's employment hereunder upon (A) the continued failure by
the Executive to substantially perform his duties hereunder (other than any such
failure  resulting  from the  Executive's  incapacity  due to physical or mental
illness or the removal of the Executive's office to a location more than 5 miles
from its current  location),  which  failure has not been cured (i) within three
days after a written  demand for  substantial  performance  is  delivered to the
Executive by the Company that  specifically  identifies  the manner in which the
Company believes the Executive has not  substantially  performed his duties (the
"Three Day  Period"),  or (ii) in the event such  failure  cannot be  reasonably
cured within the Three Day Period, within 20 days thereafter,  provided that the
Executive  promptly  commences and  thereafter  diligently  prosecutes  the cure
thereof,  or (B) the  Executive's  conviction  of any criminal act or fraud with
respect  to  the  Company.   Notwithstanding  the  foregoing,   the  Executive's
employment  may not be  terminated  for cause  unless and until the  Company has
delivered  to  the  Executive  a  copy  of a  resolution  duly  adopted  by  the
affirmative vote of not less than 80 percent of the entire Board of Directors at
a meeting of the Board (of which the  Executive was given at least 20 days prior
written notice and an opportunity, together with his counsel, to be heard before
the Board),  finding that in the good faith opinion of the Board,  the Executive
has not substantially  performed his duties (which failure shall be described in
detail) and such failure has not been cured within the period  described in (ii)
above.  In  addition,  the  Company  shall  not  have  cause  to  terminate  the
Executive's employment hereunder as a result of any event occurring prior to the
date hereof and previously  disclosed to the Company. The burden of establishing
cause shall be upon the Company.

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     6.2  Termination  by  the  Executive.   The  Executive  may  terminate  his
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employment  hereunder  for "good  reason"  upon not less  than  five days  prior
written  notice to the Company.  For purposes of this  Agreement,  "good reason"
shall mean the continued failure by the Company to perform its obligations under
this  Agreement  (including  any  material  change by the Company in the duties,
responsibilities  and powers of the Executive as set forth herein or the removal
of the  Executive's  office to a  location  more than 5 miles  from its  current
location) which failure has not been cured (i) within three days after a written
demand  for  performance  is  delivered  to the  Company by the  Executive  that
specifically  identifies the manner in which the Executive  believes the Company
has not performed its obligations (the "Three Day Period"), or (ii) in the event
such a failure  cannot be reasonably  cured within the Three Day Period,  within
twenty (20) days  thereafter  provided that the Company  promptly  commences and
thereafter diligently prosecutes the cure thereof.

     6.3 Change in Control.
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         A. The Executive may terminate his  employment  under this Agreement at
any time for "good reason" (as defined below) within 36 months after the date of
a Change in Control (as defined below) of the Company.


         B. A "Change in Control"of the Company shall be deemed to have occurred
if:

            (1) any "person" (as such term is used in Sections 13(d)  and  14(d)
    of the Securities Exchange Act of 1934 (the "Exchange  Act") as in effect on
    the date hereof), other than individuals  beneficially  owning,  directly or
    indirectly,  common  stock  of  the  Company representing 30% or more of the
    Company's issued and  outstanding  common stock as of the Effective Date, is
    or becomes the beneficial  owner,  directly or indirectly,  of  common stock
    of  the  Company  representing 30% or more of the  Company's then issued and
    outstanding common stock; or

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            (2) individuals  who constitute  the Company's Board of Directors on
    the date hereof (the "Incumbent Board")  cease for any reason to  constitute
    at least  a majority  thereof, provided  that any person becoming a Director
    subsequent to the date hereof whose election,  or  nomination  for  election
    by the  Company's  stockholders,  was  approved  by  a  vote  of  at least a
    majority  of the  Directors  comprising  the  Incumbent  Board  (either by a
    specific  vote  or  by  approval of the proxy  statement  of the  Company in
    which such person is named as a nominee for Director,  without  objection to
    such nomination) shall be, for purposes of this clause, considered as though
    such  person  were  a  member of the  Incumbent  Board. For purposes of this
    Section  6.3(A),  "good reason" shall mean a  determination  solely   by the
    Executive,  in good  faith,  that as a result  of the  Change of  Control of
    the Company he may be  adversely  affected  (i) in  carrying  out his duties
    and  powers in  the fashion  he previously  enjoyed  or (ii)  in  his future
    prospects with the Company.


         C. If the Executive terminates his employment after a Change of Control
of  the  Company, he shall  notify the  Company in writing of the effective date
of the  termination (the "Termination  Date") of  his employment and he shall be
paid  the  greater of (i) the Base Salary  payable to the  Executive  under this
Agreement  through  to  the  Termination  Date,  or (ii) an  amount equal to the
product of (a) the  average  annual Base  Salary  paid to the  Executive  during
the  five  years  preceding  the  Termination  Date,  multiplied  by  (b) three.
The amount  payable  under this Section 6.3(C) shall be paid in a lump sum on or
before the fifth day following the Termination Date.

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     7. Interest and Counsel Fees.
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     7.1 Interest.  All amounts  payable to the Executive  under this  Agreement
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shall be due and payable at the time  specified  herein and any payment which is
not made  within  five  days of the date of  written  demand  shall be made with
interest  on the  amount  due from the due date  until paid in full at an annual
rate equal to 2% over the prime rate of interest generally published in The Wall
Street  Journal as in effect  from time to time  during the period from such due
date until the date such payment is made.


     7.2 Counsel Fees. The Company hereby  irrevocably  authorizes the Executive
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from time to time to retain  counsel of his choice at the expense of the Company
to represent  the  Executive in connection  with the  Executive's  initiation or
defense of any  litigation,  arbitration or other legal action  relating to this
Agreement  or any  provision  hereof  (whether  such action is by or against the
Company or any director,  officer,  stockholder or other person  affiliated with
the  Company,  or in any  jurisdiction).  Notwithstanding  any existing or prior
attorney-client  relationship  between the Company and such counsel, the Company
irrevocably   consents  to  the  Executive   entering  into  an  attorney-client
relationship  with such  counsel,  and in that  connection  the  Company and the
Executive  agree  that a  confidential  relationship  shall  exist  between  the
Executive and such counsel. The reasonable fees and expenses of counsel selected
by the Executive  shall be paid or reimbursed to the Executive by the Company on
a regular,  periodic basis upon  presentation by the Executive of a statement or
statements prepared by such counsel in accordance with its customary  practices,
up to a maximum aggregate amount of $250,000.  Notwithstanding the preceding, if
it should be finally  determined  by judgment  or order of a court of  competent
jurisdiction  (the time for the  appeal of which  judgment  or order  shall have
expired),  that  the  Executive  has  not  prevailed  in  any  such  litigation,
arbitration or other legal action,  the Executive  shall promptly  return to the
Company, upon its demand, any amounts so advanced in connection with such action
together with interest thereon at the rate provided in Section 7.1 above.

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     8. No Conflicting Commitments.
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     8.1 Representation and Warranty. The Executive represents and warrants that
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he has no commitments or obligations of any kind  whatsoever  inconsistent  with
this  Agreement and is under no disability  of any kind  whatsoever  which would
impair, infringe upon or limit Executive's ability to enter this Agreement or to
perform the services required hereunder.

     8.2 Indemnification. The Executive agrees to indemnify and hold the Company
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harmless  against any claim or other actions  asserted against the Company based
upon  circumstances  in which it is alleged that the  Executive has breached the
warranty set forth in Section 8.1.

     9.  Governing  Law.  This  Agreement has been executed and delivered in the
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State of New Jersey,  and shall in all respects be interpreted,  construed,  and
governed by and in accordance with the law of the State of New Jersey. Except as
otherwise  herein  provided,   all  actions  or  proceedings  arising  directly,
indirectly or otherwise in  connection  with,  out of,  related to, or from this
Agreement shall be litigated  exclusively and only in courts having situs within
the State of New  Jersey,  and the  parties  hereby  consent  and  submit to the
jurisdiction  of any state or federal  court located in the State of New Jersey.
Notwithstanding the preceding,  the Executive, at his sole and exclusive option,
exercisable  by written  notice  given to the Company at any time,  may elect to
submit any dispute  arising under this  Agreement to  resolution by  arbitration
held in Somerset County, New Jersey in accordance with the rules of the American
Arbitration Association.

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     10.  Notices.  All notices  hereunder  shall be in writing  and  personally
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delivered or mailed by registered or certified mail,  return receipt  requested,
to the following address:

                  If to the Company:

                  376 Main Street
                  P. O. Box 74
                  Bedminster, New Jersey 07921

                  If to the Executive:

                  John W. Galuchie, Jr.
                  P.O. Box 327
                  Gladstone, New Jersey 07934

The  Company  or  the  Executive may  hereafter designate another address to the
other in writing for purposes of notices under this Agreement.

     11.  Waivers.  Any waiver by any party of any  violation  of,  breach of or
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default  under any  provision of this  Agreement by the other party shall not be
construed as, or constitute, a continuing waiver of such provision, or waiver of
any other  violation of, breach of or default under any other  provision of this
Agreement.

     12.  Assignability.  This Agreement  shall not be assignable by the Company
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without the written  consent of the Executive,  except that if the Company shall
merge or consolidate with or into, or transfer  substantially  all of its assets
to, another corporation or other form of business  organization,  this Agreement
shall be binding on the Executive and be for the benefit of and binding upon the
successor of the Company  resulting from such merger,  consolidation or transfer
without the Executive's  consent,  subject to the Executive's right to terminate
his employment under Section 6.3(C).  The Executive may not assign,  pledge,  or
encumber any interest in this Agreement or any part thereof  without the express
written consent of the Company, this Agreement being personal to the Executive.

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     13.Severability.  Each provision of this  Agreement  constitutes a separate
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and distinct  undertaking,  covenant and/or provision  hereof. In the event that
any provision of this Agreement shall finally be determined to be unlawful, such
provision shall be deemed severed from this Agreement, but every other provision
of this Agreement shall remain in full force and effect, and in substitution for
any such  provision  held  unlawful,  there shall be  substituted a provision of
similar  import  reflecting  the  original  intent of the parties  hereto to the
extent permissible under law.

     IN WITNESS  WHEREOF,  the parties hereto have executed this Agreement as of
the date and year first set forth above.


                                               KENT FINANCIAL SERVICES, INC.


                                        By:    /s/ Paul O. Koether
                                               ----------------------------

                                        Title: Chairman
                                               ----------------------------


     /s/ John W. Galuchie, Jr.
     ----------------------------
         John W. Galuchie, Jr.


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