AMENDED AND RESTSTATED EMPLOYMENT AGREEMENT


     This Amended and Restated  Employment  Agreement (the  "Agreement") is made
effective as of September 30, 2008 (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 March 31, 2007 (the "Original Agreement"); and

     WHEREAS,  the Employer desires to amend and restate the Original  Agreement
in order to make  changes  to comply  with the final  regulations  issued  under
Section 409A of the Internal  Revenue Code of 1986, as amended (the "Code"),  in
April, 2007; and

     WHEREAS,  Executive  is  willing  to serve  the  Employer  on the terms and
conditions hereinafter set forth and has agreed to such changes; and

     WHEREAS,  the Board of Directors of the Employer and the Executive  believe
it is in the best interests of the Employer to enter into the Agreement in order
to reinforce  and reward the  Executive  for his service and  dedication  to the
continued  success of the Employer and incorporate  the changes  required by the
final regulations under Code Section 409A.

     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.  Notwithstanding the foregoing, all changes
to  the   Agreement   intended  to  comply  with  Code  Section  409A  shall  be
retroactively  effective  to  March  31,  2007;  and  provided  further  that no
retroactive change shall affect the compensation or benefits previously provided
to the Executive.
<PAGE>

     (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
$160,685 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,

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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.

     (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:

          (i)  the   termination  by  the  Employer  of  Executive's   full-time
employment  hereunder  for any reason  other than a  Termination  for Cause,  as
defined in Section 8 hereof,  or a  termination  upon  Retirement  as defined in
Section 7 hereof,  or a  termination  for  Disability  as set forth in Section 6
hereof; and

          (ii) Executive's  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

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<PAGE>

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;

               (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 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,  as defined in Section 9(c) hereof,  for Good Reason at any time
within 60 days following the expiration of such cure period.

          (iii)  Executive's  resignation from the Employer's employ following a
Change in Control (as defined in Section 5 below).

     No payments or benefits shall be due to Executive under this Agreement upon
the termination of Executive's  employment  except as provided in Section 4 or 5
hereof.

     (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

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<PAGE>

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.

     (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.

5.   CHANGE IN CONTROL.


     (a) Except for payments that are subject to Code Section 409A, for purposes
of this Agreement, the term "Change in Control" shall mean:

          (i) a change in  control  of a nature  that  would be  required  to be
reported in response  to Item  5.01(a) of the current  report on Form 8-K, as in
effect on the date  hereof,  pursuant  to Section 13 or 15(d) of the  Securities
Exchange Act of 1934 (the "Exchange Act"); or

          (ii) a change in control of the Bank or the Company within the meaning
of the Home Owners  Loan Act,  as amended  ("HOLA"),  and  applicable  rules and
regulations  promulgated  thereunder,  as in effect at the time of the Change in
Control; or

          (iii) any of the  following  events,  upon  which a Change in  Control
shall be deemed to have occurred:

               (A) any "person" (as the term is used in Sections 13(d) and 14(d)
of the Exchange  Act) is or becomes the  "beneficial  owner" (as defined in Rule
13d-3 under the Exchange  Act),  directly or  indirectly,  of  securities of the

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<PAGE>

Company  representing  25% or more of the  combined  voting  power of  Company's
outstanding  securities  except  for  any  securities  purchased  by the  Bank's
employee stock ownership plan or trust; or

               (B)  individuals who constitute the Board on the date hereof (the
"Incumbent  Board")  cease for any  reason  to  constitute  at least a  majority
thereof,  provided  that any person  becoming a director  subsequent to the date
hereof whose election was approved by a vote of at least  three-quarters  of the
directors  comprising the Incumbent  Board, or whose  nomination for election by
the Company's stockholders was approved by the same Nominating Committee serving
under an  Incumbent  Board,  shall be,  for  purposes  of this  subsection  (B),
considered as though he were a member of the Incumbent Board; or

               (C) a sale of all or substantially  all the assets of the Bank or
the Company,  or a plan of  reorganization,  merger,  consolidation,  or similar
transaction  occurs in which the  security  holders of the  Company  immediately
prior to the  consummation  of the  transaction do not own at least 50.1% of the
securities of the surviving  entity to be outstanding  upon  consummation of the
transaction; or

               (D)  a  proxy  statement  is  issued   soliciting   proxies  from
stockholders of the Company by someone other than the current  management of the
Company,  seeking  stockholder  approval of a plan of reorganization,  merger or
consolidation   of  the  Company  or  similar   transaction  with  one  or  more
corporations  as a result  of  which  the  outstanding  shares  of the  class of
securities  then subject to the plan are to be exchanged  for or converted  into
cash or property or securities not issued by the Company; or

               (E) a  tender  offer  is  made  for  25% or  more  of the  voting
securities of the Company and the shareholders  owning beneficially or of record
25% or more of the  outstanding  securities  of the  Company  have  tendered  or
offered to sell their  shares  pursuant to such tender  offer and such  tendered
shares have been accepted by the tender offeror.

     (b) Notwithstanding the preceding  paragraphs of this Section, 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  Section  4 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

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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  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 UPON RETIREMENT.

     Termination  of Executive's  employment  based on  "Retirement"  shall mean
termination  of  Executive's  employment  at age 65 or in  accordance  with  any
retirement policy established by the Board with Executive's consent with respect
to him.  Upon  termination  of  Executive  based on  Retirement,  no  amounts or
benefits shall be due Executive  under this  Agreement,  and Executive  shall be
entitled to all  benefits  under any  retirement  plan of the Employer and other
plans to which Executive is a party.

8.   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

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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 8, 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.

9.    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
Section 19 of this Agreement.  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

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<PAGE>

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 9 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.

10.  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 Employer 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

                                       9
<PAGE>

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 from pursuing any other remedies for such
breach  or  threatened  breach,  including  the  recovery  of  damages  from the
Executive.

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.  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.

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  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.

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 Employer 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.

                                       10
<PAGE>

     (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 Employer may terminate Executive's  employment at any time, but any
termination by the Employer's  Board other than Termination for Cause as defined
in Section 8 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.

     (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.   ss.1818(e)(3)]   or  8(g)(1)  [12  U.S.C.
ss.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.  ss.1818(e)(4)] or 8(g)(1) [12 U.S.C.  ss.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.
ss.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 OTS 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.  ss.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

                                       11
<PAGE>

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.

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  twenty-five
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.

     (a) 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  Employer  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 545.121 of the OTS Regulations and Section 18(k) of the
Federal Deposit Insurance Act, 12 U.S.C. ss.1828(k),  and the regulations issued
thereunder in 12 C.F.R. Part 359.

                                       12
<PAGE>

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 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

                                       13

<PAGE>





                                   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.



9/30/2008                                     By: /s/ Gary S. Olson
------------------------------------              -----------------------------
Date                                              Gary S. Olson, President and
                                                  Chief Executive Officer


                                             ESSA BANK & TRUST



9/30/2008                                     By:  /s/ Gary S. Olson
------------------------------------              -----------------------------
Date                                              Gary S. Olson, President and
                                                  Chief Executive Officer


                                              EXECUTIVE:



9/30/2008                                          /s/ Allan A. Muto
-----------------------------------                ----------------------------
Date                                               Allan A. Muto