AMENDED AND RESTATED AGREEMENT AND GENERAL RELEASE

EXHIBIT 10.1

AMENDED AND RESTATED
AGREEMENT AND GENERAL RELEASE

     This AMENDED AND RESTATED AGREEMENT AND GENERAL RELEASE (this “ Agreement ”) is made as of March 25, 2007 and entered into by and among PSB BANCORP, INC., a Pennsylvania corporation (“ PSB ”), FIRST PENN BANK, a Pennsylvania-chartered bank and a wholly-owned subsidiary of PSB (“ First Penn ” and, together with PSB, “ Employer ”), and VINCENT J. FUMO (“ Executive ”).

     WHEREAS, PSB has entered into that certain Agreement and Plan of Merger (the “ Merger Agreement ”) dated as of August 30, 2006 and amended on September 21, 2006 with Conestoga Bancorp, Inc., a Pennsylvania corporation (“ Conestoga ”), Conestoga Bank, a Pennsylvania bank and a wholly-owned subsidiary of Conestoga, and FP Acquisition Corp., a Pennsylvania corporation and a wholly-owned subsidiary of Conestoga (“ Merger Sub ”), pursuant to which Merger Sub will merge with and into PSB with PSB being the surviving corporation (the “ Merger ”);

     WHEREAS, Executive and Employer are parties to that certain Agreement dated as of April 1, 2003 and Executive and PSB are parties to that certain Supplemental Executive Retirement Plan Agreement dated as of July 1, 2004, as amended, (collectively, the “ Existing Employment Arrangements ”);

     WHEREAS, Conestoga required, as an essential condition and inducement to its execution and delivery to PSB of the Merger Agreement, that Executive execute and deliver to PSB and First Penn this Agreement;

     WHEREAS, Conestoga has asserted certain rights under the Merger Agreement entitling it to a reduction in the purchase price in the Merger;

     WHEREAS, as an essential condition and inducement to Conestoga agreeing to forego those rights, Conestoga requires the Executive amend and restate this Agreement on the terms herein set forth;

     WHEREAS, Executive has determined that it is in his interest as a director, officer, shareholder and optionholder of PSB to amend and restate this Agreement on the terms herein set forth; and

     WHEREAS, Executive and Employer expressly acknowledge that Conestoga, Merger Sub and their respective subsidiaries and affiliates are intended third-party beneficiaries of this Agreement.

     NOW, THEREFORE, in consideration of the mutual covenants, representations, warranties and agreements contained herein, and intending to be legally bound hereby, Employer and Executive agree as follows:

     1.  Resignation . Executive hereby resigns from his position as a member of the Board of Directors of PSB and from all positions that he holds or has ever held with Employer or any of its subsidiaries or with any other entity with respect to which Employer has requested Executive to perform services, in each case, effective as of the Effective Time (as defined in the Merger Agreement). Upon the effectiveness of such resignation, Employer’s employment of Executive shall conclude permanently and irrevocably.

     2.  Amendment and Restatement of Agreements Subject to Code Section 409A. As of the Effective Time or, if earlier, the latest date permitted for amendment of plans to conform to the requirements of Section 409A of the Internal Revenue Code of 1986, as amended (the “ Code ”), the Existing Employment Arrangements are hereby amended and restated in their entirety and all terms thereof are superseded by the terms set forth herein effective as of January 1, 2005. In accordance with the preceding sentence and pursuant to Proposed Treasury Regulation § 1.409A-3(h)(2)(viii)(B), this Agreement amends the Existing Employment Arrangements to permit termination of the arrangements and acceleration of the time and form of payment within 30 days preceding or the 12 months following a change of control (as defined in Proposed Treasury Regulations § 1.409A-2(g)(4)(i)).

     3.  Termination of Agreements and Plans . As of the Effective Time, except for this Agreement or as otherwise expressly provided in this Agreement: (a) all agreements between Executive, on the one hand, and Employer or one of its subsidiaries or affiliates, on the other hand, shall be terminated and of no further force or effect, and Employer and its subsidiaries and affiliates shall have no continuing obligation to make any payment or to provide any benefit to Executive under any such agreement; and (b) Executive’s right to participate or receive any payments or other benefits under any employee benefit plan or program maintained by Employer or one of its subsidiaries or affiliates shall immediately cease or be cancelled, and Employer and its subsidiaries and affiliates shall have no continuing obligation to make any payment or to provide any benefit to Executive under any such plan or program. Notwithstanding the foregoing, Executive shall remain obligated to repay any amounts borrowed from Employer or its subsidiaries and otherwise comply with all of his obligations arising under any note, mortgage or other agreement relating to the same, and PSB shall remain obligated to honor the terms of any option to purchase PSB common shares previously awarded to Executive and any restricted PSB common shares previously awarded to Executive. Furthermore, nothing in this Section 3 or elsewhere in this Agreement shall be construed to preclude Executive from receiving any benefit to which he is entitled under an “employee pension benefit plan” as defined in Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended (“ ERISA ”) that is qualified under Code Section 401(a). Executive acknowledges that, to the extent the plan sponsor intended to amend any such “employee pension benefit plans” to freeze benefit accruals and eligibility thereunder, such plans have been properly amended, and subsequently administered (to the extent necessary to effect any such amendment), in compliance with applicable law and such amendments have remained in effect at all times thereafter. As part of Executive’s release of claims in Section 14 of this Agreement, Executive releases and agrees not to bring any claims against either the Released Parties (as defined therein) or any fiduciary with respect to such plans alleging that any such plan was not so amended (and/or subsequently administered) in compliance with applicable law or that such amendments failed to remain in effect at any time thereafter. Nothing in this Section 3 or

elsewhere in this Agreement shall be construed to limit Executive’s rights under ERISA Section 602 and Code Section 4980B(f).

     4.  Non-Competition; Non-Solicitation.

     (a) From the date of this Agreement until 18 months after the Effective Time, Executive will not directly for himself or any third party, become engaged in any business or activity which is directly in competition with any services or financial products sold by, or any business or activity engaged in by, Employer, Conestoga or their Subsidiaries (as defined in the Merger Agreement), including, without limitation, the taking and accepting of deposits, the making of loans and/or the extension of credit and brokering loans and/or leases, within a 35 mile radius of 1835 Market Street, Philadelphia, Pennsylvania. This provision shall not restrict Executive from owning or investing in publicly traded securities of financial institutions, so long as his aggregate holdings in any financial institution do not exceed ten percent (10%) of the outstanding capital stock of such institution. After the first anniversary of the Effective Time, Executive may request a waiver from Conestoga of the applicability of this Section 4(a) to certain limited activities in which Executive wishes to engage that would not reasonably be expected to be detrimental to the interests of Conestoga and its subsidiaries, and Conestoga shall not unreasonably withhold any such requested waiver.

     (b) From the date of this Agreement until the third anniversary of the Effective Time, Executive will not solicit any person who is, or within the five years preceding the date of this Agreement was, a customer of Employer or its subsidiaries, or solicit potential customers who are or were identified through leads developed during the course of employment with Employer or any of its subsidiaries, or otherwise divert or attempt to divert any existing business of Employer or any of its subsidiaries within any area of 75 miles of 1835 Market Street, Philadelphia, Pennsylvania.

     (c) From the date of this Agreement until the third anniversary of the Effective Time, Executive will not, directly for himself or any third party: (i) solicit, induce, recruit or cause another person in the employment of Employer, Conestoga or their subsidiaries to terminate his or her employment for the purposes of joining, associating or becoming employed with any business or activity which is in competition with any services or financial products sold, or any business or activity engaged in, by Employer, Conestoga or their subsidiaries; or (ii) hire any person employed by Employer, Conestoga or their subsidiaries as of the date of this Agreement or as of the Effective Time, except for any such person that Conestoga acknowledges was terminated by Conestoga or one of its subsidiaries following the Effective Time. Notwithstanding the foregoing, Executive shall be entitled to hire Anthony DiSandro.

     (d) Nothing contained in this Section 4 or elsewhere in this Agreement shall be deemed to limit the ability of Executive to discharge his duties as a member of the Pennsylvania Senate. Furthermore, nothing contained in this Section 4 or elsewhere in this Agreement shall be deemed to prohibit Executive’s service on the board of directors of the Pennsylvania Higher Education Assistance Administration (“ PHEAA ”) or limit Executive’s activities on behalf of PHEAA.

     5.  Cooperation . From the date of this Agreement and at all times thereafter, Executive shall cooperate fully with Employer and its counsel as Employer reasonably requests with respect to any matter (including any litigation, arbitration, investigation or governmental proceeding) relating to matters with which Executive was involved during the term of his employment with Employer, including full disclosure of all relevant information and truthfully testifying in connection with any such proceeding or investigation. Executive shall render such cooperation in a timely manner and at such times and places as may be mutually agreeable to the parties. Notwithstanding the foregoing, Executive shall have no cooperation obligation under this Section 5 in respect of any litigation, arbitration, investigation or governmental proceeding in which Executive is, or is reasonably likely to be, a named party who is adverse to Employer, Conestoga or their subsidiaries in such litigation, arbitration, investigation or governmental proceeding. Executive shall promptly notify Employer if he is contacted for an interview or if he receives a subpoena in any matter relating in any way to matters with which he was involved during his employment with Employer, except as may be prohibited by law or regulation.

     6.  Payments and Benefits .

     (a) Upon the occurrence of the Effective Time and the consummation of the Merger, Employer shall make the payments specified to Executive in paragraphs 2, 3, 4 and 5 on Exhibit A hereto, subject to adjustment as provided in subsection (b) below, by wire transfer of immediately available funds to an account designated by Executive in writing. Executive acknowledges that, except as specifically and expressly set forth in this Agreement and on Exhibit A hereto, Employer does not have and will not have any obligation to provide Executive at any time in the future with any payments, benefits or considerations.

     (b) The amount set forth in paragraph 3 on Exhibit A shall be subject to adjustment up or down as follows. If the aggregate sum of fees and expenses set forth on the closing statements delivered by PSB’s professional and other advisors pursuant to Section 8.2(e) of the Merger Agreement exceeds $1,112,600, the payment provided in paragraph 3 on Exhibit A shall be reduced by an amount equal to one half of such excess. If the aggregate amount of such fees and expenses is less than $1,112,600, the payment provided in paragraph 3 on Exhibit A shall be increased by an amount equal to one half of such shortfall.

     (c) Nothing contained in this Agreement shall be deemed a waiver by Executive of any rights Executive may have to indemnification and other benefits under Section 7.7 of the Merger Agreement except that Executive hereby waives any right to indemnification by Employer, Conestoga or any of their successors or affiliates for any damages, liabilities, costs or expenses, including attorneys fees, related to or arising from (i) any matter included or referenced in the Revised and Updated Schedules delivered by PSB to Conestoga on the date hereof in connection with the second amendment to the Merger Agreement that was not included in the original disclosure schedule delivered by PSB to Conestoga on August 30, 2006, or (ii) any matter included or referenced in the indictment filed on February 6, 2007 in the matter of United States of America v.

Vincent J. Fumo, Ruth Arnao a/k/a “Ruth Rubin,” Leonard P. Luchko and Mark C. Eister and any amendment or supplement to such filing.

     7.  Retention. Executive shall continue to serve as the Chairman of the Board of PSB and First Penn until the Effective Time and shall faithfully and diligently fulfill the duties and responsibilities of such positions. If Executive continues to be employed by Employer from the date hereof until the Effective Time, he shall receive the retention bonus specified in paragraph 2 of Exhibit A hereto. If Executive’s employment with Employer is terminated for any reason prior to the Effective Time other than as a result of Executive’s death or Disability (as