Exhibit 10.1
ESB FINANCIAL CORPORATION
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
     This AMENDED AND RESTATED EMPLOYMENT AGREEMENT (this “Agreement”), is made
and entered into as of the 21st day of November 2006, between ESB Financial
Corporation (the “Corporation”), a Pennsylvania corporation, and Charlotte A.
Zuschlag (the “Executive”).
WITNESSETH:
     WHEREAS, the Executive is currently employed as President and Chief
Executive Officer of the Corporation pursuant to an amended employment agreement
between the Corporation and the Executive entered into as of December 1, 2002
and which is being further amended and restated as of the date hereof (the
“Corporation Employment Agreement”);
     WHEREAS, the Executive is currently employed as President and Chief
Executive Officer of ESB Bank, a Pennsylvania chartered savings bank and a
wholly owned subsidiary of the Corporation (the “Bank”) (the Corporation and the
Bank are referred to together herein as the “Employers”) pursuant to an amended
employment agreement entered into as of December 1, 2002, and which is being
further amended and restated as of the date hereof;
     WHEREAS, the Corporation desires to amend and restate the Corporation
Employment Agreement in order to make changes to comply with Section 409A of the
Internal Revenue Code of 1986, as amended (the “Code”), as well as certain other
changes;
     WHEREAS, the Corporation desires to assure itself of the continued
availability of the Executive’s services as provided in this Agreement; and
     WHEREAS, the Executive is willing to serve the Corporation on the terms and
conditions hereinafter set forth;
     NOW THEREFORE, in consideration of the mutual agreements herein contained,
and upon the other terms and conditions hereinafter provided, the Corporation
and the Executive hereby agree as follows:
     1. Definitions. The following words and terms shall have the meanings set
forth below for the purposes of this Agreement:
     (a) Average Annual Compensation. The Executive’s “Average Annual
Compensation” for purposes of this Agreement shall be deemed to mean the average
level of compensation paid to the Executive by the Employers or any subsidiary
thereof during the most recent five taxable years preceding the Date of
Termination and included in the Executive’s gross

 

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income for tax purposes and any income earned and deferred by the Executive
pursuant to any plan or arrangement of the Employers.
     (b) Base Salary. “Base Salary” shall have the meaning set forth in Section
3(a) hereof.
     (c) Cause. Termination of the Executive’s employment for “Cause” shall mean
termination because of 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 this Agreement.
     (d) Change in Control. “Change in Control” shall mean a change in the
ownership of the Corporation or the Bank, a change in the effective control of
the Corporation or the Bank or a change in the ownership of a substantial
portion of the assets of the Corporation or the Bank, in each case as provided
under Section 409A of the Code and the regulations thereunder.
     (e) Code. “Code” shall mean the Internal Revenue Code of 1986, as amended.
     (f) Date of Termination. “Date of Termination” shall mean (i) if the
Executive’s employment is terminated for Cause, the date on which the Notice of
Termination is given, and (ii) if the Executive’s employment is terminated for
any other reason, the date specified in such Notice of Termination.
     (g) Disability. “Disability” shall mean the Executive (i) is unable to
engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment which can be expected to result in
death or can be expected to last for a continuous period of not less than
12 months, or (ii) is, by reason of any medically determinable physical or
mental impairment which can be expected to result in death or can be expected to
last for a continuous period of not less than 12 months, receiving income
replacement benefits for a period of not less than three months under an
accident and health plan covering employees of the Employers.
     (h) Good Reason. Termination by the Executive of the Executive’s employment
for “Good Reason” shall mean termination by the Executive following a Change in
Control based on:
          (i) Without the Executive’s express written consent, the failure to
elect or to re-elect or to appoint or to re-appoint the Executive to the offices
of President and Chief Executive Officer of the Employers or a material adverse
change made by the Employers in the Executive’s functions, duties or
responsibilities as President and Chief Executive Officer of the Employers;
          (ii) Without the Executive’s express written consent, a reduction by
either of the Employers in the Executive’s Base Salary as the same may be
increased from time to time or,

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except to the extent permitted by Section 3(b) hereof, a reduction in the
package of fringe benefits provided to the Executive, taken as a whole;
          (iii) The principal executive office of either of the Employers is
relocated outside of the Ellwood City, Pennsylvania area or, without the
Executive’s express written consent, either of the Employers require the
Executive to be based anywhere other than an area in which the Employers’
principal executive office is located, except for required travel on business of
the Employers to an extent substantially consistent with the Executive’s present
business travel obligations; or
          (iv) The failure by the Corporation to obtain the assumption of and
agreement to perform this Agreement by any successor as contemplated in
Section 9 hereof.
     (i) IRS. IRS shall mean the Internal Revenue Service.
     (j) Notice of Termination. Any purported termination of the Executive’s
employment by the Corporation for any reason, including without limitation for
Cause, Disability or Retirement, or by the Executive for any reason, including
without limitation for Good Reason, shall be communicated by written “Notice of
Termination” to the other party hereto. For purposes of this Agreement, a
“Notice of Termination” shall mean a dated notice which (i) indicates the
specific termination provision in this Agreement relied upon, (ii) sets forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination of the Executive’s employment under the provision so indicated,
(iii) specifies a Date of Termination, which shall be not less than thirty
(30) nor more than ninety (90) days after such Notice of Termination is given,
except in the case of the Corporation’s termination of the Executive’s
employment for Cause, which shall be effective immediately, and (iv) is given in
the manner specified in Section 10 hereof.
     (k) Retirement. “Retirement” shall mean voluntary termination by the
Executive in accordance with the Employers’ retirement policies, including early
retirement, generally applicable to their salaried employees.
     2. Term of Employment.
     (a) The Corporation hereby employs the Executive as President and Chief
Executive Officer and the Executive hereby accepts said employment and agrees to
render such services to the Corporation on the terms and conditions set forth in
this Agreement. The term of employment under this Agreement shall be for three
years from December 1, 2006 and, upon approval of the Board of Directors of the
Corporation, shall extend for an additional year on December 1st of each
subsequent calendar year such that at any time after December 1, 2006 the
remaining term of this Agreement shall be from two to three years, absent notice
of non-renewal as set forth below. Prior to December 1, 2007 and each December
1st thereafter, the Board of Directors of the Corporation shall consider and
review (with appropriate corporate documentation thereof, and after taking into
account all relevant factors, including the Executive’s performance hereunder)
an extension of the term of this Agreement, and the term shall continue to
extend each year if the Board of Directors approves such extension unless the

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Executive gives written notice to the Employers of the Executive’s election not
to extend the term, with such written notice to be given not less than thirty
(30) days prior to any such December 1st. If the Board of Directors elects not
to extend the term, it shall give written notice of such decision to the
Executive not less than thirty (30) days prior to any such December 1st. If any
party gives timely notice that the term will not be extended as of December 1st
of any year, then this Agreement shall terminate at the conclusion of its
remaining term. References herein to the term of this Agreement shall refer both
to the initial term and successive terms.
     (b) During the term of this Agreement, the Executive shall perform such
executive services for the Corporation as may be consistent with her titles and
from time to time assigned to her by the Corporation’s Board of Directors.
     3. Compensation and Benefits.
     (a) The Employers shall compensate and pay the Executive for her services
during the term of this Agreement at a minimum base salary of $364,104 per year
(“Base Salary”), which may be increased from time to time in such amounts as may
be determined by the Boards of Directors of the Employers and may not be
decreased without the Executive’s express written consent. In addition to her
Base Salary, the Executive shall be entitled to receive during the term of this
Agreement such bonus payments as may be determined by the Boards of Directors of
the Employers.
     (b) During the term of this Agreement, the Executive shall be entitled to
participate in and receive the benefits of any pension or other retirement
benefit plan, profit sharing, stock option, employee stock ownership, or other
plans, benefits and privileges given to employees and executives of the
Employers, to the extent commensurate with her then duties and responsibilities,
as fixed by the Boards of Directors of the Employers. The Corporation shall not
make any changes in such plans, benefits or privileges which would adversely
affect the Executive’s rights or benefits thereunder, unless such change occurs
pursuant to a program applicable to all executive officers of the Corporation
and does not result in a proportionately greater adverse change in the rights of
or benefits to the Executive as compared with any other executive officer of the
Corporation. Nothing paid to the Executive under any plan or arrangement
presently in effect or made available in the future shall be deemed to be in
lieu of the salary payable to the Executive pursuant to Section 3(a) hereof.
     (c) During the term of this Agreement, the Executive shall be entitled to
paid annual vacation in accordance with the policies as established from time to
time by the Boards of Directors of the Employers, which shall in no event be
less than five weeks per annum. The Executive shall not be entitled to receive
any additional compensation from the Employers for failure to take a vacation,
nor shall the Executive be able to accumulate unused vacation time from one year
to the next, except to the extent authorized by the Boards of Directors of the
Employers.
     (d) During the term of this Agreement, in keeping with past practices, the
Employers shall continue to provide the Executive with the automobile she
presently drives. The Employers

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shall be responsible and shall pay for all costs of insurance coverage, repairs,
maintenance and other incidental expenses, including license, fuel and oil.
     (e) In the event the Executive’s employment is terminated by the
Corporation due to the Executive’s Disability, Retirement or death, the
Employers shall provide continued life, medical, dental and disability coverage
substantially identical to the coverage maintained by the Employers for the
Executive immediately prior to her termination. The medical and dental coverage
shall continue until the earlier of (a) the Executive’s death, except for
coverage of any beneficiaries pursuant to Section 3(f) below, or (b) the date on
which the Executive is entitled to receive benefits from a subsequent employer
which are substantially similar to the medical and dental coverage provided by
the Corporation. The life and disability coverage shall cease upon the earlier
of the expiration of the remaining term of this Agreement or the Executive’s
death. During the period that the Executive receives medical and dental coverage
and/or life and disability coverage, the Executive shall pay the employee share
of the costs of such coverages as if she was still an employee. Notwithstanding
the foregoing, if the provision of any of the benefits covered by this Section
3(e) would trigger the 20% tax and interest penalties under Section 409A of the
Code either due to the nature of such benefit or the length of time it is being
provided, then the benefit(s) that would trigger such tax and interest penalties
due to the nature of such benefit shall not be provided at all and the
benefit(s) that would trigger the tax and interest penalties if provided beyond
the “limited period of time” set forth in the regulations under Section 409A
shall not be provided beyond such limited period of time (the “Excluded
Benefits”), and in lieu of the Excluded Benefits the Employers shall pay to the
Executive, in a lump sum within 30 days following termination of employment or
within 30 days after such determination should it occur after termination of
employment, a cash amount equal to the cost to the Employers of providing the
Excluded Benefits.
     (f) In the event of the Executive’s death during the term of this
Agreement, her spouse, estate, legal representative or named beneficiaries (as
directed by the Executive in writing) shall be paid on a monthly basis the
Executive’s annual compensation from the Employers at the rate in effect at the
time of the Executive’s death for the remainder of the term of this Agreement,
as well as the medical and dental benefits specified in Section 3(e) above to
any dependents of the Executive who were covered by the Employers at the time of
the Executive’s death. In the event the Executive’s employment is terminated due
to Disability during the term of this Agreement, the Executive shall be paid on
a monthly basis (i) the Executive’s annual compensation from the Employers at
the rate in effect at the time of termination due to Disability for the
remainder of the term of this Agreement, as well as the benefits specified in
Section 3(e) hereof, and (ii) upon the expiration of the term of this Agreement,
two-thirds (66.67%) of the Executive’s Base Salary at the time of termination
due to Disability until the Executive reaches the normal retirement age of 65;
provided however, there shall be deducted from the amounts paid the Executive
pursuant to this Section 3(f) any amounts actually paid to the Executive
pursuant to any disability insurance or similar plan or program which the
Employers have instituted or may institute on behalf of the Executive or their
employees for the purpose of compensating employees in the event of disability,
the Social Security Act, the Workers Compensation or Occupational Disease Act or
any state disability benefit law; and provided further however, that such
payments shall be delayed until the first business day of the month following
the lapse of six months from the date of termination of

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employment if deemed necessary by the Employers to avoid the tax and interest
penalties imposed by Section 409A of the Code. If the payments are delayed
pursuant to the last proviso clause in the preceding sentence, then the payments
that would have been provided to the Executive in the absence of such six-month
delay shall be paid to the Executive on the first business day of the month
following the lapse of six months from the date of termination of employment.
Notwithstanding the foregoing, if the provision of any of the benefits covered
by this Section 3(f) would trigger the 20% tax and interest penalties under
Section 409A of the Code either due to the nature of such benefit or the length
of time it is being provided, then the benefit(s) that would trigger such tax
and interest penalties due to the nature of such benefit shall not be provided
at all and the benefit(s) that would trigger the tax and interest penalties if
provided beyond the “limited period of time” set forth in the regulations under
Section 409A shall not be provided beyond such limited period of time (the
“Excluded Benefits”), and in lieu of the Excluded Benefits the Employers shall
pay to the Executive, in a lump sum within 30 days following termination of
employment or within 30 days after such determination should it occur after
termination of employment, a cash amount equal to the cost to the Employers of
providing the Excluded Benefits.
     (g) The Executive’s compensation, benefits and expenses shall be paid by
the Corporation and the Bank in the same proportion as the time and services
actually expended by the Executive on behalf of each respective Employer.
     4. Expenses. The Employers shall reimburse the Executive or otherwise
provide for or pay for all reasonable expenses incurred by the Executive in
furtherance of or in connection with the business of the Employers, including,
but not by way of limitation, automobile expenses described in Section 3(d)
hereof, and traveling expenses, and all reasonable entertainment expenses
(whether incurred at the Executive’s residence, while traveling or otherwise),
subject to such reasonable documentation and other limitations as may be
established by the Boards of Directors of the Employers. If such expenses are
paid in the first instance by the Executive, the Employers shall reimburse the
Executive therefor.
     5. Termination.
     (a) The Corporation shall have the right, at any time upon prior Notice of
Termination, to terminate the Executive’s employment hereunder for any reason,
including without limitation termination for Cause, Disability or Retirement,
and the Executive shall have the right, upon prior Notice of Termination, to
terminate her employment hereunder for any reason.
     (b) In the event that (i) the Executive’s employment is terminated by the
Corporation for Cause or (ii) the Executive terminates her employment hereunder
other than for Disability, Retirement, death or Good Reason, the Executive shall
have no right pursuant to this Agreement to compensation or other benefits for
any period after the applicable Date of Termination.
     (c) In the event that the Executive’s employment is terminated as a result
of Disability, Retirement or the Executive’s death during the term of this
Agreement, the Executive

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shall have no right pursuant to this Agreement to compensation or other benefits
for any period after the applicable Date of Termination, except as provided for
in Sections 3(e) and 3(f) hereof.
     (d) In the event that (i) the Executive’s employment is terminated by the
Corporation for other than Cause, Disability, Retirement or the Executive’s
death or (ii) such employment is terminated by the Executive (a) due to a
material breach of this Agreement by the Corporation, which breach has not been
cured within fifteen (15) days after a written notice of non-compliance has been
given by the Executive to the Employers, or (b) for Good Reason, then the
Corporation shall:
     (A) pay to the Executive, in a lump sum as of the Date of Termination, a
cash severance amount equal to three (3) times that portion of the Executive’s
Average Annual Compensation paid by the Corporation,
     (B) maintain and provide for a period ending at the earlier of
(i) thirty-six (36) months after the Date of Termination or (ii) the date of the
Executive’s full-time employment by another employer (provided that the
Executive is entitled under the terms of such employment to benefits
substantially similar to those described in this subparagraph (B)), at no cost
to the Executive, the Executive’s continued participation in all group
insurance, life insurance, health and accident, disability and other employee
benefit plans, programs and arrangements offered by the Corporation in which the
Executive was entitled to participate immediately prior to the Date of
Termination (other than retirement plans or stock compensation plans of the
Employers), subject to subparagraphs (D) and (E) below,
     (C) if the Executive is still receiving medical and dental coverage
pursuant to Section 5(d)(B) above upon the expiration of thirty-six (36) months
after the Date of Termination, maintain and provide medical and dental coverage
for the Executive for a period ending at the earlier of (i) the Executive’s
death or (ii) the date on which the Executive is entitled to receive benefits
from a subsequent employer which are substantially similar to the medical and
dental coverage provided by the Corporation, subject to subparagraphs (D) and
(E) below, provided that during the period that the Executive receives medical
and dental coverage pursuant to this Section 5(d)(C), the Executive shall pay
the employee share of the costs of such coverage as if she was still an
employee,
     (D) in the event that the Executive’s participation in any plan, program or
arrangement as provided in subparagraph (B) or (C) of this Section 5(d) is
barred, or during such period any such plan, program or arrangement is
discontinued or the benefits thereunder are materially reduced, the Corporation
shall arrange to provide the Executive with benefits substantially similar to
those which the Executive was entitled to receive under such plans, programs and
arrangements immediately prior to the Date of Termination, and
     (E) if the provision of any of the benefits covered by this
Section 5(d)(B), (C) or (D) would trigger the 20% tax and interest penalties
under Section 409A of the Code either due to the nature of such benefit or the
length of time it is being provided, then the benefit(s) that would trigger such
tax and interest penalties due to the nature of such benefit shall not be
provided at all and the benefit(s) that would trigger the tax and interest
penalties if provided beyond the “limited

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period of time” set forth in the regulations under Section 409A shall not be
provided beyond such limited period of time (the “Excluded Benefits”), and in
lieu of the Excluded Benefits the Employers shall pay to the Executive, in a
lump sum within 30 days following termination of employment or within 30 days
after such determination should it occur after termination of employment, a cash
amount equal to the cost to the Employers of providing the Excluded Benefits.
     6. Payment of Additional Benefits under Certain Circumstances.
     (a) If the payments and benefits pursuant to Section 5 hereof, either alone
or together with other payments and benefits which the Executive has the right
to receive from the Employers (including, without limitation, the payments and
benefits which the Executive would have the right to receive from the Bank
pursuant to Section 5 of the Agreement between the Bank and the Executive dated
as of the date hereof (“Bank Agreement”), before giving effect to any reduction
in such amounts pursuant to Section 6 of the Bank Agreement), would constitute a
“parachute payment” as defined in Section 280G(b)(2) of the Code (the “Initial
Parachute Payment,” which includes the amounts paid pursuant to clause
(A) below), then the Corporation shall pay to the Executive, in a lump sum
within five business days after the Date of Termination, a cash amount equal to
the sum of the following:
     (A) the amount by which the payments and benefits that would have otherwise
been paid by the Bank to the Executive pursuant to Section 5 of the Bank
Agreement are reduced by the provisions of Section 6 of the Bank Agreement;
     (B) twenty (20) percent (or such other percentage equal to the tax rate
imposed by Section 4999 of the Code) of the amount by which the Initial
Parachute Payment exceeds the Executive’s “base amount” from the Employers, as
defined in Section 280G(b)(3) of the Code, with the difference between the
Initial Parachute Payment and the Executive’s base amount being hereinafter
referred to as the “Initial Excess Parachute Payment”; and
     (C) such additional amount (tax allowance) as may be necessary to
compensate the Executive for the payment by the Executive of state and federal
income and excise taxes on the payment provided under clause (B) above and on
any payments under this clause (C). In computing such tax allowance, the payment
to be made under clause (B) above shall be multiplied by the “gross up
percentage” (“GUP”). The GUP shall be determined as follows:

         
 
  GUP =   Tax Rate
 
      1-Tax Rate

The Tax Rate for purposes of computing the GUP shall be the highest marginal
federal and state income and employment-related tax rate (including Social
Security and Medicare taxes), including any applicable excise tax rate,
applicable to the Executive in the year in which the payment under clause
(B) above is made, and shall also reflect the phase-out of deductions and the
ability to deduct certain of such taxes.

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     (b) Notwithstanding the foregoing, if it shall subsequently be determined
in a final judicial determination or a final administrative settlement to which
the Executive is a party that the actual excess parachute payment as defined in
Section 280G(b)(1) of the Code is different from the Initial Excess Parachute
Payment (such different amount being hereafter referred to as the “Determinative
Excess Parachute Payment”), then the Corporation’s independent tax counsel or
accountants shall determine the amount (the “Adjustment Amount”) which either
the Executive must pay to the Corporation or the Corporation must pay to the
Executive in order to put the Executive (or the Corporation, as the case may be)
in the same position the Executive (or the Corporation, as the case may be)
would have been if the Initial Excess Parachute Payment had been equal to the
Determinative Excess Parachute Payment. In determining the Adjustment Amount,
the independent tax counsel or accountants shall take into account any and all
taxes (including any penalties and interest) paid by or for the Executive or
refunded to the Executive or for the Executive’s benefit. As soon as practicable
after the Adjustment Amount has been so determined, the Corporation shall pay
the Adjustment Amount to the Executive or the Executive shall repay the
Adjustment Amount to the Corporation, as the case may be.
     (c) In each calendar year that the Executive receives payments of benefits
that constitute a parachute amount, the Executive shall report on her state and
federal income tax returns such information as is consistent with the
determination made by the independent tax counsel or accountants of the
Corporation as described above. The Corporation shall indemnify and hold the
Executive harmless from any and all losses, costs and expenses (including
without limitation, reasonable attorneys’ fees, interest, fines and penalties)
which the Executive incurs as a result of so reporting such information. The
Executive shall promptly notify the Corporation in writing whenever the
Executive receives notice of the institution of a judicial or administrative
proceeding, formal or informal, in which the federal tax treatment under
Section 4999 of the Code of any amount paid or payable under this Section 6 is
being reviewed or is in dispute. The Corporation shall assume control at its
expense over all legal and accounting matters pertaining to such federal tax
treatment (except to the extent necessary or appropriate for the Executive to
resolve any such proceeding with respect to any matter unrelated to amounts paid
or payable pursuant to this Section 6) and the Executive shall cooperate fully
with the Corporation in any such proceeding. The Executive shall not enter into
any compromise or settlement or otherwise prejudice any rights the Corporation
may have in connection therewith without the prior consent of the Corporation.
     7. Mitigation; Exclusivity of Benefits.
     (a) The Executive shall not be required to mitigate the amount of any
benefits hereunder by seeking other employment or otherwise, nor shall the
amount of any such benefits be reduced by any compensation earned by the
Executive as a result of employment by another employer after the Date of
Termination or otherwise, except as set forth in Section 5(d)(B) and (C) above.
     (b) The specific arrangements referred to herein are not intended to
exclude any other benefits which may be available to the Executive upon a
termination of employment with the Employers pursuant to employee benefit plans
of the Employers or otherwise.

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     8. Withholding. All payments required to be made by the Corporation
hereunder to the Executive shall be subject to the withholding of such amounts,
if any, relating to tax and other payroll deductions as the Corporation may
reasonably determine should be withheld pursuant to any applicable law or
regulation.
     9. Assignability. The Corporation may assign this Agreement and its rights
and obligations hereunder in whole, but not in part, to any corporation, bank or
other entity with or into which the Corporation may hereafter merge or
consolidate or to which the Corporation may transfer all or substantially all of
its assets, if in any such case said corporation, bank or other entity shall by
operation of law or expressly in writing assume all obligations of the
Corporation hereunder as fully as if it had been originally made a party hereto,
but may not otherwise assign this Agreement or its rights and obligations
hereunder. The Executive may not assign or transfer this Agreement or any rights
or obligations hereunder.
     10. Notice. For the purposes of this Agreement, notices and all other
communications provided for in this Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed by certified or
registered mail, return receipt requested, postage prepaid, addressed to the
respective addresses set forth below:

         
 
  To the Corporation:   Secretary
ESB Financial Corporation
600 Lawrence Avenue
Ellwood City, Pennsylvania 16117
 
       
 
  To the Bank:   Secretary
ESB Bank, F.S.B.
600 Lawrence Avenue
Ellwood City, Pennsylvania 16117
 
       
 
  To the Executive:   Charlotte A. Zuschlag
At the address last appearing on
the personnel records of the Employers

     11. Amendment; Waiver. No provisions of this Agreement may be modified,
waived or discharged unless such waiver, modification or discharge is agreed to
in writing signed by the Executive and such officer or officers as may be
specifically designated by the Board of Directors of the Corporation to sign on
its behalf. No waiver by any party hereto at any time of any breach by any other
party hereto of, or compliance with, any condition or provision of this
Agreement to be performed by such other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same or at any prior or
subsequent time. In addition, notwithstanding anything in this Agreement to the
contrary, the Corporation may amend in good faith any terms of this Agreement,
including retroactively, in order to comply with Section 409A of the Code.

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     12. Governing Law. The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of the United States
where applicable and otherwise by the substantive laws of the Commonwealth of
Pennsylvania.
     13. Nature of Obligations. Nothing contained herein shall create or require
the Corporation to create a trust of any kind to fund any benefits which may be
payable hereunder, and to the extent that the Executive acquires a right to
receive benefits from the Corporation hereunder, such right shall be no greater
than the right of any unsecured general creditor of the Corporation.
     14. Headings. The section headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
     15. Validity. The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other
provisions of this Agreement, which shall remain in full force and effect.
     16. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.
     17. Regulatory Prohibition. Notwithstanding any other provision of this
Agreement to the contrary, any payments made to the Executive pursuant to this
Agreement, or otherwise, are subject to and conditioned upon their compliance
with Section 18(k) of the FDIA (12 U.S.C. §1828(k)) and 12 C.F.R. Part 359.
     18. Entire Agreement. This Agreement embodies the entire agreement between
the Corporation and the Executive with respect to the matters agreed to herein.
All prior agreements between the Corporation and the Executive with respect to
the matters agreed to herein, including without limitation the Agreement between
the Employers and the Executive dated June 13, 1990 and the Agreements between
the Corporation and the Executive dated November 16, 1999, December 1, 2000,
December 1, 2001, and December 1, 2002 are hereby superseded and shall have no
force or effect. Notwithstanding the foregoing, nothing contained in this
Agreement shall affect the agreement of even date being entered into between the
Bank and the Executive.
[Signature page follows]

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     IN WITNESS WHEREOF, this Agreement has been executed as of the date first
above written.

              Attest:   ESB FINANCIAL CORPORATION    
 
           
/s/ Frank D. Martz
  By:   /s/ William B. Salsgiver    
 
           
Frank D. Martz
      William B. Salsgiver    
Group Senior Vice President of Operations and Secretary
      Chairman of the Board of Directors    
 
                EXECUTIVE    
 
           
 
  By:   /s/ Charlotte A. Zuschlag    
 
           
 
      Charlotte A. Zuschlag    

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