Exhibit 10.1



 Exhibit 10.1 
 AMENDMENT TO THE 
 NEWPORT FEDERAL SAVINGS BANK 
 EMPLOYMENT AGREEMENT 
 WHEREAS, Kevin M. McCarthy (the “Executive”) entered into an employment 
 agreement with Newport Federal Savings
Bank (the “Bank”) effective October 15, 2005 (the 
 “Agreement”); and 
 WHEREAS, in connection with the mutual to stock conversion of the Bank, the Bank 
 and the Executive desire to amend the Agreement to include Newport Bancorp, Inc. (the 
 “Company”) as a guarantor of the payments under the Agreement and to facilitate some 
 ministerial changes, including a change to the definition of Termination for Cause requested by 
 the Office of Thrift Supervision;
and 
 WHEREAS, the Agreement provides that the Agreement may be amended or modified 
 at any time prior to a Change in Control by means of a written instrument signed by the parties. 
 NOW, THEREFORE, the Bank and the Executive hereby agree to amend the 
 Agreement as follows: 
 FIRST CHANGE 
 Effective as of the closing of the Company’s initial public offering, the first 
 paragraph of the Agreement shall be amended to add the following sentence to the end of 
 the paragraph: 
 “Newport Bancorp, Inc., the holding company of
the Bank (the “Holding 
 Company”) will serve as guarantor under this Agreement.” 
 SECOND CHANGE 
 Effective as of the closing of the Company’s initial public offering, Section 12(a) 
 shall be deleted in its entirety and
replaced with the following new Section 12(a): 
 “For purposes of this Agreement, a “Change in Control”
means the occurrence of 
 any one of the following events: 
 (1) Merger: The Company or the Bank merges into or consolidates with another 
 corporation, or merges another corporation into the Company or the Bank, 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 or the Bank 
 immediately before the merger or consolidation. 
 (2) Acquisition of Significant Share Ownership: The Company files, or is required to 
 file, 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, 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 (b) 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 or the Bank’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 or the 
 Bank’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 
 stockholders) by a vote of at least two-thirds 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;

 (4) Sale of Assets: The Company or the Bank sells to a third party all or substantially 
 all of its assets. 
 THIRD CHANGE

 Effective as of the closing of the Company’s initial public offering, the following 
 Section 27 shall be added to the Agreement: 
 “27. Source of Payments. 
  

	 	 a.
	 All payments provided for in this Agreement shall be timely paid in cash or check 


 from the general funds of the Bank. The Company, however, unconditionally 
 guarantees payment and provision of all amounts and benefits due hereunder to 
 Executive and, if such amounts and benefits due from the Bank are not timely 
 paid or provided by the Bank, such amounts and benefits shall be paid or provided 
 by the Company. 
  

	 	 b.
	 Notwithstanding any provision herein to the contrary, to the extent that payments 


 and benefits, as provided by this Agreement, are paid to or received by Executive 
 under the Employment Agreement in effect between Executive and the Company 
 (the “Company Agreement”), such compensation payments and benefits paid by 
 the Company will be subtracted from any amount due simultaneously to 
 Executive under similar provisions of this Agreement. Payments pursuant to this 
 Agreement and the Company Agreement shall be allocated in proportion to the 
 level of activity and the time expended on such activities by Executive as 
 determined by the Company and the Bank.” 
  

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 FOURTH CHANGE 
 Effective June 27, 2006, Section 11(d)(i)(6) of the Agreement shall be deleted in its 
 entirety and replaced with the following new Section 11(d)(i)(6): 
 “(6) Willful
violation of any law, rule or regulation (other than traffic violations or 
 similar offenses) any felony conviction or final
cease-and-desist order, or material breach of any 
 provision of this Agreement; or” 
 IN WITNESS WHEREOF, the Bank has caused this Amendment to the Agreement to 
 be executed by its duly authorized officer, and Executive has signed this Amendment, on the 18th 
 day of July, 2006. 
  

					
	 ATTEST:
	 		 	 NEWPORT FEDERAL SAVINGS BANK

			
	 /s/ Judy Tucker
	 		 	 /s/ Peter W. Rector

		 		 	 For the Board of Directors

			
		 		 	 NEWPORT BANCORP, INC.

		 		 	 (as guarantor)

			
		 		 	 /s/ Peter W. Rector

		 		 	 For the Board of Directors

			
	 WITNESS:
	 		 	 EXECUTIVE

			
	 /s/ Judy Tucker
	 		 	 /s/ Kevin M. McCarthy

		 		 	 Kevin M. McCarthy


  

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