AMENDED AND RESTATED EMPLOYMENT AGREEMENT
 
This Amended and Restated Employment Agreement (the “Agreement”) is made
effective as of May 1, 2013 (the “Effective Date”), by and between ESSA Bank &
Trust, a Pennsylvania chartered stock savings association with its principal
office in Stroudsburg, Pennsylvania (the “Bank”), ESSA Bancorp, Inc. a
Pennsylvania corporation that owns 100% of the common stock of the Bank (the
“Company”), and Allan A. Muto (“Executive”).  Any reference to the “Employer”
shall mean both the Company and the Bank.
 
WHEREAS, the Executive is currently employed as Executive Vice President and
Chief Financial Officer of the Employer pursuant to an employment agreement that
was effective September 30, 2008 (the “Prior Agreement”); and
 
WHEREAS, the Employer and the Executive desire to amend and restate the Prior
Agreement to provide that severance payments made in connection with a Change in
Control shall only be paid in the event that (i) the Executive’s employment is
involuntarily terminated without cause within 24 months after the Change in
Control or (ii) the Executive voluntarily resigns for Good Reason within 24
months after the Change in Control; and
 
WHEREAS, the Employer and the Executive also wish to make certain clarifying
changes to the Prior Agreement, as set forth herein; and
 
WHEREAS, the Prior Agreement is hereby replaced in its entirety by this
Agreement.
 
NOW, THEREFORE, in consideration of the mutual covenants herein contained, and
upon the other terms and conditions hereinafter provided, the parties hereby
agree as follows:
 
1.  
POSITION AND RESPONSIBILITIES.

 
During the period of his employment hereunder, Executive agrees to serve as
Executive Vice President and Chief Financial Officer of the Employer (the
“Executive Position”).  Executive shall be responsible for the overall
management of the Employer's financial matters, and shall be responsible for
establishing business objectives, policies and strategic plans in conjunction
with the Chief Executive Officer (the "CEO").
 
2.  
TERM AND DUTIES.

 
(a)           Three Year Contract; Annual Renewal.  Executive’s period of
employment with the Employer (“Employment Period”) shall begin on the Effective
Date and shall renew on each anniversary date thereafter, until the date that
the Employer gives Executive written notice of non-renewal (“Non-Renewal
Notice”).  The Employment Period shall end on the date that is thirty-six (36)
months after the date of the Non-Renewal Notice, unless the parties agree that
the Employment Period shall end on an earlier date.

 
 

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(b)           Annual Performance Evaluation.  On either a fiscal year or
calendar year basis, (consistently applied from year to year), the Employer
shall conduct an annual evaluation of Executive’s performance. The annual
performance evaluation proceedings shall be included in the minutes of the Board
meeting that next follows such annual performance review.

(c)           Continued Employment Following Termination of Employment
Period.  Nothing in this Agreement shall mandate or prohibit a continuation of
Executive’s employment following the expiration of the Employment Period upon
such terms and conditions as the Employer and Executive may mutually agree.

(d)           Duties; Membership on Other Boards.  During the Employment Period,
except for periods of absence occasioned by illness, reasonable vacation
periods, and reasonable leaves of absence approved by the CEO, Executive shall
devote substantially all his business time, attention, skill, and efforts to the
faithful performance of his duties hereunder including activities and services
related to the organization, operation and management of the Employer; provided,
however, that, with the approval of the CEO, Executive may serve, or continue to
serve, on the boards of directors of, and hold any other offices or positions
in, business companies or business organizations, which, in the CEO’s judgment,
will not present any conflict of interest with the Employer, or materially
affect the performance of Executive’s duties pursuant to this Agreement it being
understood that membership in and service on boards or committees of social,
religious, charitable or similar organizations does not require CEO approval
pursuant to this Section 2(d). For purposes of this Section 2(d), CEO approval
shall be deemed to have been granted as to service with any such business
company or organization that Executive was serving as of the date of this
Agreement.
 
3.  
COMPENSATION, BENEFITS AND REIMBURSEMENT.

 
(a)   Base Salary.  The compensation specified under this Agreement shall
constitute the salary and benefits paid for the duties described in Section
2.  The Employer shall pay Executive as compensation a salary of not less than
$186,121 per year (“Base Salary”).  Such Base Salary shall be payable biweekly,
or with such other frequency as officers and employees are generally paid.
During the period of this Agreement, Executive’s Base Salary shall be reviewed
at least annually. Such review may be conducted by the CEO, and the Employer may
increase, but not decrease (except a decrease that is generally applicable to
all employees) Executive’s Base Salary (with any increase in Base Salary to
become “Base Salary” for purposes of this Agreement).
 
(b)   Bonus and Incentive Compensation.  Executive will be entitled to incentive
compensation and bonuses as provided in any plan of the Employer in which
Executive is eligible to participate.  Nothing paid to Executive under any such
plan or arrangement will be deemed to be in lieu of other compensation to which
Executive is entitled under this Agreement.
 
(c)   Employee Benefits.  The Employer will provide Executive with employee
benefit plans, arrangements and perquisites substantially equivalent to those in
which Executive was participating or otherwise deriving benefit from immediately
prior to the beginning of the term of this Agreement, and the Employer will not,
without Executive’s prior written consent, make any changes in such plans,
arrangements or perquisites which would adversely affect Executive’s rights or
benefits thereunder, except as to any changes that are applicable to all
participating employees or as reasonably or customarily available.  Without
limiting the generality of the foregoing provisions of this Section 3(c),
Executive will be entitled to participate in or receive benefits under any
employee benefit plans including, but not limited to, retirement plans,
supplemental retirement plans, pension plans, profit-sharing plans,
health-and-accident insurance plans, medical coverage or any other employee
benefit plan or arrangement made available by the Employer in the future to its
senior executives, subject to and on a basis consistent with the terms,
conditions and overall administration of such plans and arrangements.
 
 
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(d)   Paid Time Off.  Executive shall be entitled to paid vacation time each
year during the Employment Period (measured on a fiscal or calendar year basis,
in accordance with the Employer’s usual practices), as well as sick leave,
holidays and other paid absences in accordance with the Employer’s policies and
procedures for senior executives.  Any unused paid time off during an annual
period shall be treated in accordance with the Employer’s personnel policies as
in effect from time to time.
 
(e)   Expense Reimbursements.  During the Employment Period, the Employer shall
pay or reimburse Executive for all reasonable travel, entertainment and other
reasonable expenses incurred by Executive during the course of performing his
obligations under this Agreement, upon presentation to the Employer of an
itemized account of such expenses in such form as the Employer may reasonably
require.  All reimbursements under this Section 3(e) shall be paid as soon as
practicable by the Employer; provided, however, that no payment shall be made
later than March 15 of the year immediately following the year in which the
expense was incurred.
 
4.  
PAYMENTS TO EXECUTIVE UPON AN EVENT OF TERMINATION.

 
(a)   Upon the occurrence of an Event of Termination (as herein defined) during
Executive’s term of employment under this Agreement, the provisions of this
section shall apply. As used in this Agreement, an “Event of Termination’’ shall
mean and include any one or more of the following, as set forth in Section
4(a)(i), (ii) or (iii):
 
(i)           the involuntary termination by the Employer of Executive’s
full-time employment hereunder for any reason other than a Termination for Cause
or a termination for Disability; and
 
(ii)           Executive’s voluntary resignation from the Employer’s employ upon
any of the following (which shall be treated as termination of employment for
“Good Reason”), unless consented to by Executive:
 
(A)           failure to appoint Executive to the Executive Position set forth
in Section 1 above, or a material change in Executive’s function, duties, or
responsibilities, which change would cause Executive’s position to become one of
lesser responsibility, importance, or scope from the position and
responsibilities described in Section 1 above, to which Executive has not agreed
in writing (and any such material change shall be deemed a continuing breach of
this Agreement);
 
(B)           a relocation of Executive’s principal place of employment to a
location that is more than 50 miles from the location of the Employer’s
principal executive offices as of the date of this Agreement;
 
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(C)           a material reduction in the benefits and perquisites, including
Base Salary, to Executive from those being provided in the Agreement as of the
Effective Date (except for any reduction that is part of a reduction in pay or
benefits that is generally applicable to officers or employees);
 
(D)           a liquidation or dissolution of the Bank Company or the Company
other than liquidations or dissolutions that are caused by reorganizations that
do not affect the status of the Executive; or
 
(E)           a material breach of this Agreement by the Employer.
 
Upon the occurrence of any event described in clause (ii) above, Executive shall
have the right to elect to terminate his employment under this Agreement by
resignation within 90 days after the event giving rise to said right to elect,
which termination by Executive shall be an Event of Termination.  The Employer
shall have at least 30 days to remedy any event set forth in clauses (ii)(A)
through (E) above; provided, however, that the Employer shall be entitled to
waive such period and make an immediate payment hereunder.  If the Employer
remedies the event within such 30 day cure period, then no Good Reason shall be
deemed to exist with respect to such event.  If the Employer does not remedy the
event within such 30 days cure period, then the Executive may deliver a Notice
of Termination for Good Reason at any time within 60 days following the
expiration of such cure period.
 
(iii)           Within 24 months following a Change in Control (as defined in
Section 5 below), the Executive’s employment is involuntarily terminated without
Cause or the Executive voluntarily resigns for Good Reason.
 
No payments or benefits shall be due to Executive under this Agreement upon the
termination of Executive’s employment except as provided in this Section 4.
 
(b)   Within 30 days following the occurrence of an Event of Termination, the
Employer shall pay Executive, or, in the event of his subsequent death, his
beneficiary or beneficiaries, or his estate, as the case may be, as severance
pay or liquidated damages, or both, a lump sum cash amount equal to three times
the sum of (i) the highest annual rate of Base Salary paid to Executive at any
time under the Agreement, plus (ii) the highest bonus paid to Executive with
respect to the three completed fiscal years prior to the Event of
Termination.  Such payments shall not be reduced in the event Executive obtains
other employment following termination of employment.
 
(c)   Within 30 days following the occurrence of an Event of Termination, the
Employer shall pay Executive, or in the event of his subsequent death, his
beneficiary or beneficiaries, or his estate, as the case may be, a lump sum
equal to the excess, if any, of the present value of the benefit that Executive
would have been entitled to under the Employer’s defined benefit pension plan if
Executive had continued working for the Employer for 36 months after the
effective date of such Event of Termination, over the present value of the
benefits to which Executive was actually entitled as of the effective date of
such Event of Termination.
 
(d)   Upon the occurrence of an Event of Termination, the Employer will provide
at the Employer’s expense, life insurance and non-taxable medical, dental and
vision coverage substantially comparable, as reasonably or customarily
available, to the coverage maintained by the Employer for Executive prior to his
termination, except to the extent such coverage may be changed in its
application to all Employer employees.  Such coverage shall cease 36 months
following the Event of Termination.  
 
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(e)   Notwithstanding the foregoing, in the event the Executive is a Specified
Employee (as defined herein), solely to the extent necessary to avoid penalties
under Code Section 409A, payment to the Executive’s benefit pursuant to Sections
4(b), 4(c) and 4(d), if applicable, shall be made to the Executive on the first
day of the seventh month following the Executive’s Event of
Termination.  “Specified Employee” shall be interpreted to comply with Code
Section 409A and shall mean a key employee within the meaning of Code Section
416(i) (without regard to paragraph 5 thereof), but an individual shall be a
“Specified Employee” only if the Company or the Bank or any affiliate is a
publicly traded company.
 
(f)   For purposes of this Agreement, Event of Termination shall be construed to
require a “Separation from Service” as defined in Code Section 409A and the
Treasury Regulations promulgated thereunder, such that the Employer and
Executive reasonably anticipate that the level of bona fide services Executive
would perform after termination would permanently decrease to a level that is
less than 50% of the average level of bona fide services performed (whether as
an employee or an independent contractor) over the immediately preceding
36-month period.
 
(g)   Notwithstanding anything in this Agreement to the contrary, Executive
shall not be entitled to any severance payments or benefits hereunder unless and
until Executive executes a release of his claims against the Bank, the Company
and any affiliate, and their officers, directors, successors and assigns,
releasing said persons from any and all claims, rights, demands, causes of
action, suits, arbitrations or grievances relating to the employment
relationship, including claims under (i) Title VII of the Civil Rights Act of
1964 (race, color, religion, sex and national origin discrimination); (2) 42
U.S.C. Section 1981 (age discrimination); (3) 29 U.S.C. Section 621-634 (age
discrimination); (4) 29 U.S.C. Section 206(d)(i) (equal pay); (5) applicable
state laws regarding discrimination including race, color, national origin,
ancestry, religion, physical or mental disability, medical condition, military
status, marital status, sex, gender, sexual orientation or age, but not
including claims for benefits under tax-qualified plans or other benefit plans
in which Executive is vested, claims for benefits required by applicable law or
claims with respect to obligations set forth in this Agreement that survive the
termination of this Agreement.  In order to comply with the requirements of Code
Section 409A and applicable age discrimination laws, the release shall be
provided to Executive no later than his Date of Termination and Executive shall
have no fewer than twenty-one (21) days to consider the release, and following
Executive’s execution of the release, Executive shall have seven (7) days to
revoke said release.
 
5.  
CHANGE IN CONTROL.

 
(a)   “Change in Control” shall mean (i) a change in the ownership of the Bank
or the Company, (ii) a change in the effective control of the Bank or Company,
or (iii) a change in the ownership of a substantial portion of the assets of the
Bank or Company, as described below.
 
(i)           A change in ownership occurs on the date that any one person, or
more than one person acting as a group (as defined in Treasury Regulations
section 1.409A-3(i)(5)(v)(B)), acquires ownership of stock of the Bank or
Company that, together with stock held by such person or group, constitutes more
than 50% of the total fair market value or total voting power of the stock of
such corporation.
 
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(ii)           A change in the effective control of the Bank or Company occurs
on the date that either (A) any one person, or more than one person acting as a
group (as defined in Treasury Regulations section 1.409A-3(i)(5)(vi)(D))
acquires (or has acquired during the 12-month period ending on the date of the
most recent acquisition by such person or persons) ownership of stock of the
Bank or Company possessing 30% or more of the total voting power of the stock of
the Bank or Company, or (B) a majority of the members of the Bank’s or Company’s
board of directors is replaced during any 12-month period by directors whose
appointment or election is not endorsed by a majority of the members of the
Bank’s or Company’s board of directors prior to the date of the appointment or
election, provided that this subsection (ii) is inapplicable where a majority
shareholder of the Bank or Company is another corporation.
 
(iii)           A change in a substantial portion of the Bank’s or Company’s
assets occurs on the date that any one person or more than one person acting as
a group (as defined in Treasury Regulations section 1.409A-3(i)(5)(vii)(C))
acquires (or has acquired during the 12-month period ending on the date of the
most recent acquisition by such person or persons) assets from the Bank or
Company that have a total gross fair market value equal to or more than 40% of
the total gross fair market value of (i) all of the assets of the Bank or
Company, or (ii) the value of the assets being disposed of, either of which is
determined without regard to any liabilities associated with such assets.
 
(b)   Notwithstanding anything in this Agreement to the contrary, in the event
that the aggregate payments or benefits to be made or afforded to Executive in
the event of a Change in Control would be deemed to include an “excess parachute
payment” under Section 280G of the Code or any successor thereto, then the cash
severance payable under this Agreement shall be reduced by the minimum amount
necessary to result in no portion of the payments and benefits payable by the
Employer Under Section 4 being non-deductible pursuant to Code Section 280G and
subject to an excise tax imposed under Code Section 4999.
 
6.  
TERMINATION FOR DISABILITY OR DEATH.

 
(a)   Termination of Executive’s employment based on “Disability” shall be
construed to comply with Code section 409A and shall be deemed to have occurred
if (i) the Executive 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 last for a continuous period of not less than 12
months; (ii) by reason of any medically determinable physical or mental
impairment which can be expected to result in death, or last for a continuous
period of not less than 12 months, the Executive is receiving income replacement
benefits for a period of not less than three months under an accident and health
plan covering employees of the Employer; or (iii) the Executive is determined to
be totally disabled by the Social Security Administration. The provisions of
paragraph 6(b) and (c) shall apply upon the termination of the Executive’s
employment for Disability.
 
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(b)   The Executive shall be entitled to receive benefits under any short or
long term disability plan maintained by the Employer.  To the extent such
benefits are less than the Executive’s Base Salary, the Employer will pay
Executive an amount equal to the difference between such disability plan
benefits and the amount of Executive’s Base Salary for the longer of (i) the
remaining term of the Agreement or (ii) one year following his termination of
employment due to Disability.  Any payments required hereunder shall be payable
in monthly installments and shall commence within 30 days following the date on
which Executive is determined to be Disabled.
 
(c)   The Employer will cause to be continued life insurance and non-taxable
medical, dental and vision coverage substantially comparable, as reasonable or
customarily available, to the coverage maintained by the Employer for Executive
prior to his termination for Disability, except to the extent such coverage may
be changed in its application to all Employer employees or not available on an
individual basis to an employee terminated for Disability.  This coverage shall
cease upon the earlier of (i) the date Executive returns to the full-time
employment of the Employer; (ii) Executive’s full-time employment by another
employer; (iii) Executive attaining the age of 65; or (iv) Executive’s death.
 
(d)   In the event of Executive’s death during the term of the Agreement, his
estate, legal representatives or named beneficiaries (as directed by executive
in writing) shall be paid Executive’s Base Salary as defined in paragraph 3(a)
at the rate in effect at the time of Executive’s death for a period of one (1)
year from the date of Executive’s death, and the Employer will continue to
provide non-taxable medical, dental, vision and other insurance benefits
normally provided for Executive’s family (in accordance with its customary
co-pay percentages) for one (1) year after Executive’s death.  Such payments are
in addition to any other life insurance benefits that the Executive’s
beneficiaries may be entitled to receive under any employee benefit plan
maintained by the Employer for the benefit of the Executive, including, but not
limited to, the Employer’s tax-qualified retirement plans and the Executive
Salary Continuation Agreement (SERP).
 
7.  
TERMINATION FOR CAUSE.

 
    (a)           The Employer may terminate the Executive’s employment at any
time, but any termination other than Termination for Cause, as defined herein,
shall not prejudice the Executive’s right to compensation or other benefits
under the Agreement.  The Executive shall have no right to receive compensation
or other benefits for any period after Termination for “Cause.”  Termination for
“Cause” shall include termination because of the Executive’s personal
dishonesty, incompetence, willful misconduct, breach of fiduciary duty involving
personal profit, material breach of the Employer’s Code of Ethics, material
violation of the Sarbanes-Oxley requirements for officers of public companies
that in the reasonable opinion of the CEO or the Board will likely cause
substantial financial harm or substantial injury to the reputation of the
Employer, willfully engaging in actions that in the reasonable opinion of the
CEO or the Board will likely cause substantial financial harm or substantial
injury to the business reputation of the Employer, intentional failure to
perform stated duties, willful violation of any law, rule or regulation (other
than routine traffic violations or similar offenses) or final cease-and-desist
order, or material breach of any provision of the Agreement.

(b)   For purposes of this Section, no act or failure to act, on the part of the
Executive, shall be considered “willful” unless it is done, or omitted to be
done, by the Executive in bad faith or without reasonable belief that the
Executive’s action or omission was in the best interests of the Employer.  Any
act, or failure to act, based upon the direction of the CEO or based upon the
advice of counsel for the Employer shall be conclusively presumed to be done, or
omitted to be done, by the Executive in good faith and in the best interests of
the Employer.
 
8.  
NOTICE.

 
(a)   Any purported termination by the Employer for Cause shall be communicated
by Notice of Termination to Executive.  If, within 30 days after any Notice of
Termination for Cause is given, Executive notifies the Employer that a dispute
exists concerning the termination, the parties shall promptly proceed to
arbitration.  Notwithstanding the pendency of any such dispute, the Employer
shall discontinue paying Executive’s compensation until the dispute is finally
resolved in accordance with this Agreement.  If it is determined that Executive
is entitled to compensation and benefits under Section 4 of this Agreement, the
payment of such compensation and benefits by the Employer shall commence
immediately following the date of resolution by arbitration, with interest due
Executive on the cash amount that would have been paid pending arbitration (at
the prime rate as published in The Wall Street Journal from time to time).
 
(b)   Any other purported termination by the Employer or by Executive shall be
communicated by a Notice of Termination to the other party.  If, within 30 days
after any Notice of Termination is given, the party receiving such Notice of
Termination notifies the other party that a dispute exists concerning the
termination, the parties shall promptly proceed to arbitration as provided in
below.  Notwithstanding the pendency of any such dispute, the Employer shall
continue to pay Executive his Base Salary, and other compensation and benefits
in effect when the notice giving rise to the dispute was given (except as to
termination of Executive for Cause); provided, however, that such payments and
benefits shall not continue beyond the date that is 36 months from the date the
Notice of Termination is given.  In the event the voluntary termination by
Executive of his employment is disputed by the Employer, and if it is determined
in arbitration that Executive is not entitled to termination benefits pursuant
to this Agreement, he shall return all cash payments made to him pending
resolution by arbitration, with interest thereon at the prime rate as published
in The Wall Street Journal from time to time if it is determined in arbitration
that Executive’s voluntary termination of employment was not taken in good faith
and not in the reasonable belief that grounds existed for his voluntary
termination.  If it is determined that the Executive is entitled to receive
severance benefits under this Agreement, then any continuation of Base Salary
and other compensation and benefits made to the Executive under this Section
shall offset the amount of any severance benefits that are due to the Executive
under this Agreement.
 
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(c)   For purposes of this Agreement, a “Notice of Termination” shall mean a
written notice which shall indicate the specific termination provision in this
Agreement relied upon and shall set forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of Executive’s
employment under the provision so indicated and “Date of Termination” shall mean
the date of the Notice of Termination.
 
9.  
POST-TERMINATION OBLIGATIONS.

 
(a)   The Executive hereby covenants and agrees that, for a period of one year
following his termination of employment with the Employer, he shall not, without
the written consent of the Employer, either directly or indirectly:
 
(i)           solicit, offer employment to, or take any other action intended
(or that a reasonable person acting in like circumstances would expect) to have
the effect of causing any officer or employee of the Employer or any of its
affiliates to terminate his or her employment and accept employment or become
affiliated with, or provide services for compensation in any capacity whatsoever
to, any business whatsoever that competes with the business of the Employee
or any of its affiliates or has headquarters or offices within 50 miles of the
locations in which the Employer or its affiliates has business operations or has
filed an application for regulatory approval to establish an office;

(ii)           become an officer, employee, consultant, director, independent
contractor, agent, sole proprietor, joint venturer, greater than 5% equity-owner
or stockholder, partner or trustee of any savings bank, savings and loan
association, savings and loan holding company, credit union, bank or bank
holding company, insurance company or agency, any mortgage or loan broker or any
other entity competing with the Employer or its affiliates in the same
geographic locations where the Employer or its affiliates has material business
interests; provided, however, that this restriction shall not apply if the
Executive’s employment is terminated following a Change in Control; or

(iii)           solicit, provide any information, advice or recommendation or
take any other action intended (or that a reasonable person acting in like
circumstances would expect) to have the effect of causing any customer of the
Employer or its affiliates to terminate an existing business or commercial
relationship with the Employer or its affiliates.

(b)   Executive shall, upon reasonable notice, furnish such information and
assistance to the Employer and/or its affiliates, as may reasonably be required
by the Employer and/or its affiliates, in connection with any litigation in
which it or any of its subsidiaries or affiliates is, or may become, a party;
provided, however, that Executive shall not be required to provide information
or assistance with respect to any litigation between the Executive and
the Employer, or any of its affiliates.
 
(c)   All payments and benefits to the Executive under this Agreement shall be
subject to the Executive’s compliance with this Section.  The parties hereto,
recognizing that irreparable injury will result to the Employer, its business
and property in the event of the Executive’s breach of this Section, agree that,
in the event of any such breach by the Executive, the Employer will be entitled,
in addition to any other remedies and damages available, to an injunction to
restrain the violation hereof by the Executive and all persons acting for or
with the Executive.  The Executive represents and admits that the Executive’s
experience and capabilities are such that the Executive can obtain employment in
a business engaged in other lines and/or of a different nature than the
Employer, and that the enforcement of a remedy by way of injunction will not
prevent the Executive from earning a livelihood.  Nothing herein will be
construed as prohibiting the Employer and the Company from pursuing any other
remedies available to them for such breach or threatened breach, including the
recovery of damages from the Executive.
 
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10.  
SOURCE OF PAYMENTS.

 
All payments provided in this Agreement shall be timely paid in cash or check
from the general funds of the Bank.  The Company, however, 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.
 
11.  
EFFECT ON PRIOR AGREEMENTS AND EXISTING BENEFITS PLANS.

 
This Agreement contains the entire understanding between the parties hereto and
supersedes any prior employment agreement between the Employer or any
predecessor of the Employer and Executive, except that this Agreement shall not
affect or operate to reduce any benefit or compensation inuring to Executive of
a kind elsewhere provided.  No provision of this Agreement shall be interpreted
to mean that Executive is subject to receiving fewer benefits than those
available to him without reference to this Agreement.
 
12.  
NO ATTACHMENT; BINDING ON SUCCESSORS.

 
(a)   Except as required by law, no right to receive payments under this
Agreement shall be subject to anticipation, commutation, alienation, sale,
assignment, encumbrance, charge, pledge, or hypothecation, or to execution,
attachment, levy, or similar process or assignment by operation of law, and any
attempt, voluntary or involuntary, to effect any such action shall be null,
void, and of no effect.
 
(b)   This Agreement shall be binding upon, and inure to the benefit of,
Executive and the Employer and their respective successors and assigns.
 
13.  
MODIFICATION AND WAIVER.

 
(a)   This Agreement may not be modified or amended except by an instrument in
writing signed by the parties hereto.
 
(b)   No term or condition of this Agreement shall be deemed to have been
waived, nor shall there be any estoppel against the enforcement of any provision
of this Agreement, except by written instrument of the party charged with such
waiver or estoppel.  No such written waiver shall be deemed a continuing waiver
unless specifically stated therein, and each such waiver shall operate only as
to the specific term or condition waived and shall not constitute a waiver of
such term or condition for the future as to any act other than that specifically
waived.
 
14.  
REQUIRED PROVISIONS.

 
(a)   The Employer may terminate Executive’s employment at any time, but any
termination by the Employer’s Board other than Termination for Cause hereof
shall not prejudice Executive’s right to compensation or other benefits under
this Agreement.  Executive shall have no right to receive compensation or other
benefits for any period after Termination for Cause.
 
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(b)   If Executive is suspended from office and/or temporarily prohibited from
participating in the conduct of the Employer’s affairs by a notice served under
Section 8(e)(3) [12 U.S.C. §1818(e)(3)] or 8(g)(1) [12 U.S.C. §1818(g)(1)] of
the Federal Deposit Insurance Act, the Employer’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
Employer may in its discretion (i) pay Executive all or part of the compensation
withheld while its Agreement obligations were suspended and (ii) reinstate (in
whole or in part) any of its obligations which were suspended.
 
(c)   If Executive is removed and/or permanently prohibited from participating
in the conduct of the Employer’s affairs by an order issued under Section
8(e)(4) [12 U.S.C. §1818(e)(4)] or 8(g)(1) [12 U.S.C. §1818(g)(1)] of the
Federal Deposit Insurance Act, all obligations of the Employer 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 Employer is in default as defined in Section 3(x)(1) [12 U.S.C.
§1813(x)(1)] of the Federal Deposit Insurance Act, all obligations of the
Employer 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 be terminated, except to the
extent determined that continuation of the Agreement is necessary for the
continued operation of the Employer, (i) by the Director of the Bank’s primary
federal regulator or his or her designee, at the time the FDIC enters into an
agreement to provide assistance to or on behalf of the Employer under the
authority contained in Section 13(c) [12 U.S.C. §1823(c)] of the Federal Deposit
Insurance Act; or (ii) by the Director or his or her designee at the time the
Director or his or her designee approves a supervisory merger to resolve
problems related to operation of the Employer or when the Employer 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)   Notwithstanding anything herein contained to the contrary, any payments to
Executive, whether pursuant to this Agreement or otherwise, are subject to and
conditioned upon their compliance with Section 18(k) of the Federal Deposit
Insurance Act, 12 U.S.C. Section 1828(k), and the regulations promulgated
thereunder in 12 C.F.R. Part 359.
 
15.  
SEVERABILITY.

 
If, for any reason, any provision of this Agreement, or any part of any
provision, is held invalid, such invalidity shall not affect any other provision
of this Agreement or any part of such provision not held so invalid, and each
such other provision and part thereof shall to the full extent consistent with
law continue in full force and effect.
 
16.  
HEADINGS FOR REFERENCE ONLY.

 
The headings of sections and paragraphs herein are included solely for
convenience of reference and shall not control the meaning or interpretation of
any of the provisions of this Agreement.
 
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17.  
GOVERNING LAW.

 
This Agreement shall be governed by the laws of the Commonwealth of Pennsylvania
but only to the extent not superseded by federal law.
 
18. 
ARBITRATION.

 
Any dispute or controversy arising under or in connection with this Agreement
shall be settled exclusively by arbitration, conducted before a single
arbitrator sitting in a location selected by the Executive within 25 miles of
Stroudsburg, Pennsylvania in accordance with the rules of the American
Arbitration Association then in effect.  Judgment may be entered on the
arbitrator’s award in any court having jurisdiction; provided, however, that
Executive shall be entitled to seek specific performance of his right to be paid
until the Date of Termination during the pendency of any dispute or controversy
arising under or in connection with this Agreement.
 
19.  
INDEMNIFICATION.

 
The Executive shall be provided with coverage under a standard directors’ and
officers’ liability insurance policy.  The Employer shall indemnify Executive to
the fullest extent permitted against all expenses and liabilities reasonably
incurred by him in connection with or arising out of any action, suit or
proceeding in which he may be involved by reason of his having been an officer
of the Employer (whether or not he continues to be an officer at the time of the
of incurring such expenses or liabilities) such expenses and liabilities to
include, but not be limited to, judgments, court costs and attorneys’ fees and
the cost of reasonable settlements (such settlements must be approved by the
Board), provided that the Executive shall not be required to indemnify or
reimburse Executive for legal expenses or liabilities incurred in connection
with an action, suit or proceeding arising from any illegal or fraudulent act
committed by Executive.  Any such indemnification shall be made consistent with
Section 18(k) of the Federal Deposit Insurance Act, 12 U.S.C. §1828(k), and the
regulations issued thereunder in 12 C.F.R. Part 359.
 
20.  
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 Company:
ESSA Bancorp, Inc.
200 Palmer Street
Stroudsburg, PA 18360
 
To the Bank:
ESSA Bank & Trust
200 Palmer Street
Stroudsburg, PA 18360
 
To Executive:
 
Allan A. Muto
1321 Crestwood Drive
Archbald, PA 18403
 

 
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SIGNATURES
 
IN WITNESS WHEREOF, the Employer has caused this Agreement to be executed by its
duly authorized representative, and Executive has signed this Agreement, on the
date first above written.
 

 
ESSA BANCORP, INC.
 
           
May 1, 2013                                                      
Date
By: /s/ Gary S. Olson
      Gary S. Olson, President and
  Chief Executive Officer
         
ESSA BANK & TRUST
           
May 1, 2013                                                      
Date
By: /s/ Gary S. Olson
      Gary S. Olson, President and
  Chief Executive Officer
         
EXECUTIVE:
           
May 1, 2013                                                      
Date
/s/ Allan A. Muto
Allan A. Muto
   

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