EXHIBIT 10.1
 
AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
 
This Amended and Restated Employment Agreement (the “Agreement”) is made
effective as of October 12, 2016 (the “Effective Date”), by and between ESSA
Bank & Trust, a Pennsylvania chartered stock savings bank with its principal
office in Stroudsburg, Pennsylvania (the “Bank”), and Charles D. Hangen
(“Executive”).  Any reference to the “Company” shall mean ESSA Bancorp, Inc., a
stock holding company which owns 100% of the common stock of the Bank.
 
WHEREAS, the Bank and the Executive are currently parties to an Employment
Agreement dated as of January 1, 2014 (the “Prior Agreement”); and

WHEREAS, in connection with the promotion of the Executive to Senior Vice
President and Chief Operating Officer, the Bank and the Executive desire to
restate the Prior Agreement and replace it in its entirety with this Agreement;
and
 
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
Senior Vice President and Chief Operating Officer of the Bank and the Company
(the “Executive Position”), and will perform the duties and will have all powers
associated with such position as set forth in any job description provided to
Executive by the Bank, and as may be set forth in the bylaws of the
Bank.  During the period provided in this Agreement, Executive also agrees to
serve, if elected, as an officer of any subsidiary or affiliate of the Bank and
in such capacity carry out such duties and responsibilities reasonably
appropriate to that office.
 
2. TERM AND DUTIES.
 
(a)           Three Year Contract; Annual Renewal.  The term of this Agreement
(“Employment Period”) shall begin on the Effective Date and shall renew on each
anniversary date thereafter, until the date that the Bank gives Executive
written notice of non-renewal (“Non-Renewal Notice”).  The Employment Period
shall end on the date that is 36 months after the date of the Non-Renewal
Notice, unless the parties agree that the Employment Period shall end on an
earlier date.

(b)           Annual Performance Evaluation.  On either a fiscal year or
calendar year basis, (consistently applied from year to year), the Bank shall
conduct an annual evaluation of Executive’s performance. The annual performance
evaluation proceedings shall be included in the minutes of the Board of
Directors (the “Board”) of the Bank’s 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 Bank 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 President and CEO
(“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 Bank; 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 Bank, 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 Bank shall pay Executive as compensation a salary of not less than
$213,150 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 Bank 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 Bank 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 Bank 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 Bank 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 Bank 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.
 

  2
 

--------------------------------------------------------------------------------

 
 
(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 Bank’s usual practices), as well as sick leave, holidays
and other paid absences in accordance with the Bank’s policies and procedures
for senior executives.  Any unused paid time off during an annual period shall
be treated in accordance with the Bank’s personnel policies as in effect from
time to time.
 
(e)    Expense Reimbursements.  During the Employment Period, the Bank 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 Bank of an itemized
account of such expenses in such form as the Bank may reasonably require.  All
reimbursements under this Section 3(e) shall be paid as soon as practicable by
the Bank; 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 Bank of Executive’s employment
hereunder for any reason other than a Termination for Cause, or a termination
for Disability; and
 
(ii)            Executive’s voluntary resignation from the Bank’s employ upon
any of the following (which shall be treated as termination of employment for
“Good Reason”), unless consented to in writing by Executive:
 
(A)           failure to appoint Executive as a Senior Vice President;
 
(B)           a relocation of Executive’s principal place of employment to a
location that is more than 50 miles from Executive’s principal place of
employment as of the date of this Agreement;
 
(C)           a material reduction in the  benefits and perquisites, including
Base Salary to Executive from those being provided in this 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 other than liquidations
or dissolutions that are caused by reorganizations that do not affect the status
of the Executive;
 

  3
 

--------------------------------------------------------------------------------

 
 
(E)           a material breach of this Agreement by the Bank, provided that it
is not a material breach of this Agreement if Executive is appointed to a
position other than that set forth in Section 1 above provided the Executive
remains a Senior Vice President; or
 
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 Bank shall
have at least 30 days to remedy any event set forth in clauses (ii)(A) through
(E) above; provided, however, that the Bank shall be entitled to waive such
period and make an immediate payment hereunder.  If the Bank 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 Bank does not remedy the event within such
30 day 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 by the
Bank 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
hereof.

(b)    Severance Pay.
 
(i)           Termination Without Cause or Termination With Good Reason Prior to
a Change in Control.  Within 30 days following the occurrence of an Event of
Termination under Section 4(a)(i) or Section 4(a)(ii) of this Agreement, the
Bank 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 two 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 target bonus opportunity that
was or could have been paid to Executive with respect to the two 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.
 
(ii)    Termination Without Cause or Termination With Good Reason Within Two
Years Following a Change in Control.  Within 30 days following the occurrence of
an Event of Termination under Section 4(a)(iii) of this Agreement, the Bank
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 target bonus opportunity that was or
could have been paid to Executive with respect to the two 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.

  4
 

--------------------------------------------------------------------------------

 
 
(c)    Within 30 days following the occurrence of an Event of Termination under
Section 4(a)(i), (ii) or (iii) of this Agreement, the Bank 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 Bank’s defined benefit pension plan if Executive had continued working for
the Bank for 24 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 under Section 4(a)(i),
(ii) or (iii) of this Agreement, the Bank will provide at the Bank’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 Bank for Executive prior to his termination, except to the extent such
coverage may be changed in its application to all Bank employees.  Such coverage
shall cease: 24 months following an Event of Termination under Section 4(a)(i)
or 36 months  following an Event of Termination under Section 4(a)(ii). If the
Bank cannot provide one or more of the benefits set forth in this paragraph
because Executive is no longer an employee, and applicable rules and regulations
(including, but not limited to the Affordable Care Act) prohibit such benefits
or the payment of such benefits in the manner contemplated, or it would subject
the Bank to penalties, then the Bank shall pay Executive a cash lump sum payment
reasonably estimated to be equal to the value of such benefits or the value of
the remaining benefits at the time of such determination. Such cash payment
shall be made in a lump sum within 30 days after the later of Executive’s date
of termination or the effective date of the rules or regulations prohibiting
such benefits or subjecting the Bank to penalties.
 
(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 of 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 Bank or any affiliate is a publicly traded
company.

(f)           For purposes 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 Bank 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.  Nothing in this Agreement or a release agreement
will limit or restrict the Executive’s rights under Section 21F of the
Securities Exchange Act of 1934 and the rules and regulations promulgated by the
Securities and Exchange Commission thereunder.  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 21 days to consider the release, and
following Executive’s execution of the release, Executive shall have 7 days to
revoke said release.

  5
 

--------------------------------------------------------------------------------

 
 
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.
 
(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 (A) all of the assets of the Bank or
Company, or (B) the value of the assets being disposed of, either of which is
determined without regard to any liabilities associated with such assets.
 

  6
 

--------------------------------------------------------------------------------

 
 

(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 Bank under this Agreement 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 Bank; 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.
 
(b)    The Executive shall be entitled to receive benefits under any short or
long term disability plan maintained by the Bank.  To the extent such benefits
are less than the Executive’s Base Salary, the Bank 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 Bank 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 Bank for Executive
prior to his termination for Disability, except to the extent such coverage may
be changed in its application to all Bank 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 Bank; (ii) Executive’s full-time employment by another
employer; (iii) Executive attaining the age of 65; or (iv) Executive’s death. If
the Bank cannot provide one or more of the benefits set forth in this paragraph
because Executive is no longer an employee, and applicable rules and regulations
(including, but not limited to the Affordable Care Act) prohibit such benefits
or the payment of such benefits in the manner contemplated, or it would subject
the Bank to penalties, then the Bank shall pay Executive a cash lump sum payment
reasonably estimated to be equal to the value of such benefits or the value of
the remaining benefits at the time of such determination. Such cash payment
shall be made in a lump sum within 30 days after the later of Executive’s date
of termination or the effective date of the rules or regulations prohibiting
such benefits or subjecting the Bank to penalties.

  7
 

--------------------------------------------------------------------------------

 
 
(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 year from the date of Executive’s death, and the Bank 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 year after Executive’s death.  If the Bank
cannot provide one or more of the benefits set forth in this paragraph because
Executive is no longer an employee, and applicable rules and regulations
(including, but not limited to the Affordable Care Act) prohibit such benefits
or the payment of such benefits in the manner contemplated, or it would subject
the Bank to penalties, then the Bank shall pay Executive a cash lump sum payment
reasonably estimated to be equal to the value of such benefits or the value of
the remaining benefits at the time of such determination. Such cash payment
shall be made in a lump sum within 30 days after the later of Executive’s date
of termination or the effective date of the rules or regulations prohibiting
such benefits or subjecting the Bank to penalties.  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
Bank for the benefit of the Executive, including, but not limited to, the Bank’s
tax-qualified retirement plans.
 
7. TERMINATION FOR CAUSE.
 
(a)           The Bank 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 Bank’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 Bank, 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 Bank, 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
Bank.  Any act, or failure to act, based upon the direction of the CEO or based
upon the advice of counsel for the Bank 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 Bank.

  8
 

--------------------------------------------------------------------------------

 
 
8. NOTICE.
 
(a)    Any purported termination by the Bank 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 Bank that a dispute
exists concerning the termination, the parties shall promptly proceed to
arbitration.  Notwithstanding the pendency of any such dispute, the Bank 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 Bank 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 Bank 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
below.  Notwithstanding the pendency of any such dispute, the Bank 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 Bank, 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.
 
(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 Bank, he shall not,
without the written consent of the Bank, 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 Bank 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 Bank or any
of its affiliates or has headquarters or offices within 50 miles of the
locations in which the Bank or its affiliates has business operations or has
filed an application for regulatory approval to establish an office;

  9
 

--------------------------------------------------------------------------------

 
 

(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 Bank or its affiliates in the same geographic
locations where the Bank 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
Bank or its affiliates to terminate an existing business or commercial
relationship with the Bank or its affiliates.

(b)           Executive shall, upon reasonable notice, furnish such information
and assistance to the Bank and/or its affiliates, as may reasonably be required
by the Bank 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 Bank, 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 Bank, 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 Bank 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 Bank, 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 Bank from pursuing any other remedies for such
breach or threatened breach, including the recovery of damages from the
Executive.

10. RECOVERY OF COMPENSATION IN CONNECTION WITH FINANCIAL RESTATEMENT
 
All compensation paid by the Company to Executive is subject to any compensation
recapture policies required by applicable law (including Section 304 of the
Sarbanes-Oxley Act of 2002) and any Company policies that are established by the
Company from time to time, including any clawback policy adopted or implemented
in respect of the Dodd-Frank Wall Street Reform and Consumer Protection Act of
2010 and such regulations as are promulgated thereunder from time to time to the
extent required therein and the implementing regulations.

  10
 

--------------------------------------------------------------------------------

 
 
11. SOURCE OF PAYMENTS.
 
All payments provided in this Agreement shall be timely paid in cash or check
from the general funds of the Bank.
 
12. 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 Bank or any predecessor of
the Bank and Executive, including the Prior Agreement, 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.
 
13. 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 Bank and their respective successors and assigns.
 
14. 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.
 
15. REQUIRED PROVISIONS.
 
(a)           The Bank may terminate Executive’s employment at any time, but any
termination by the Bank’s Board other than Termination for Cause 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.

  11
 

--------------------------------------------------------------------------------

 
 
(b)           If Executive is suspended from office and/or temporarily
prohibited from participating in the conduct of the Bank’s affairs by a notice
served under Section 8(e)(3) [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 Bank’s obligations under
this Agreement shall be suspended as of the date of service, unless stayed by
appropriate proceedings.  If the charges in the notice are dismissed, the Bank
may in its discretion (i) pay Executive all or part of the compensation withheld
while its 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 Bank’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 Bank under this
Agreement shall terminate as of the effective date of the order, but vested
rights of the contracting parties shall not be affected.
 
(d)           If the Bank is in default as defined in Section 3(x)(1) [12 U.S.C.
§1813(x)(1)] of the Federal Deposit Insurance Act, all obligations of the Bank
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 Bank, (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 Bank 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 Bank or when the Bank is determined by the Director to be in an
unsafe or unsound condition.  Any rights of the parties that have already
vested, however, shall not be affected by such action.
 
(f)           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.
 
16. 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.
 
17. 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.

  12
 

--------------------------------------------------------------------------------

 
 
18. 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.
 
19. 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.
 
20. INDEMNIFICATION.  
 
The Executive shall be provided with coverage under a standard directors’ and
officers’ liability insurance policy.  The Bank 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 Bank (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 Bank 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.
 
21. 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 Bank:
ESSA Bank & Trust
200 Palmer Street
Stroudsburg, PA 18360
 
To Executive:
 
Charles D. Hangen
Address on file with the Bank
 

 

  13
 

--------------------------------------------------------------------------------

 

SIGNATURES
 
IN WITNESS WHEREOF, the Bank 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 BANK & TRUST
           
October 12, 2016
Date
By:/s/ Gary S. Olson
      Gary S. Olson, President and
       Chief Executive Officer
         
EXECUTIVE:
           
October 12, 2016
Date
/s/ Charles D. Hangen
Charles D. Hangen
   

 
 
 
 
 
 

14