NORWOOD FINANCIAL CORP
SALARY CONTINUATION AGREEMENT - JOHN H. SANDERS
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>4
<FILENAME>ex10-11.txt
<DESCRIPTION>SALARY CONTINUATION AGREEMENT - JOHN H. SANDERS
<TEXT>
                                   WAYNE BANK
                          SALARY CONTINUATION AGREEMENT

         THIS AGREEMENT is made effective this First day of October 1999, by and
between  WAYNE  BANK,  a state bank  located  in  Honesdale,  Pennsylvania  (the
"Company") and John H. Sanders (the "Executive").

                                  INTRODUCTION

         To encourage  the  Executive to remain an employee of the Company,  the
Company is willing to provide salary continuation benefits to the Executive. The
Company will pay the benefits from its general assets.

                                    AGREEMENT

         The Executive and the Company agree as follows:

                                    Article 1
                                   Definitions

         1.1 Definitions.  Whenever used in this Agreement,  the following words
and phrases shall have the meanings specified:

               1.1.1 "Change  of  Control" shall  mean any one of the  following
          events:  (i) the  acquisition  of ownership,  holding or power to vote
          more than 25% of the Company's or the Corporation's voting stock, (ii)
          the  acquisition  of the ability to control the election of a majority
          of the Company's or the Corporation's directors, (iii) the acquisition
          of a  controlling  influence  over the  management  or policies of the
          Company or the  Corporation  by any  person or by persons  acting as a
          "group"  (within  the  meaning  of  Section  13(d)  of the  Securities
          Exchange  Act of 1934),  or (iv) during any period of two  consecutive
          years,

                                       1
<PAGE>

          individuals (the "Continuing  Directors") who at the beginning of such
          period  constitute  the  Board  of  Directors  of the  Company  or the
          Corporation (the "Existing  Board") cease for any reason to constitute
          at  least  two-thirds  thereof,  provided  that any  individual  whose
          election or nomination  for election as a member of the Existing Board
          was  approved  by a vote  of at  least  two-thirds  of the  Continuing
          Directors  then in office shall be  considered a Continuing  Director.
          Notwithstanding  the  foregoing,  in the case of (i),  (ii) and  (iii)
          hereof,  ownership or control of the Company by the Corporation itself
          shall  not  constitute  a Change  in  Control.  For  purposes  of this
          paragraph  only,  the  term  "person"  refers  to an  individual  or a
          corporation,  partnership,  trust,  association,  joint venture, pool,
          syndicate,  sole  proprietorship,  unincorporated  organization or any
          other form of entity not specifically listed herein.

               1.1.2 "Code" means the Internal Revenue Code of 1986, as amended.

               1.1.3 "Corporation" means Norwood Financial Corp.

               1.1.4 "Disability" means the  Executive  shall be deemed  totally
          and permanently disabled if he becomes unable to perform a substantial
          portion of his duties under this agreement and a physician selected by
          Bank  determines  such inability will continue for a period of six (6)
          months  or more  and is  likely  to be  permanent  and  the  Executive
          qualifies to receive total disability benefits under Bank's disability
          insurance plan.

               1.1.5 "Early Termination"  means the  Termination  of  Employment
          before Normal Retirement Age for reasons other than death, Disability,
          Termination for Cause or following a Change of Control.

               1.1.6 "Early Termination  Date" means the month,  day and year in
          which Early Termination occurs.

               1.1.7  "Normal   Retirement  Age"  means  the  Executive's   62nd
          birthday.

               1.1.8 "Normal Retirement  Date"  means  the  later of the  Normal
          Retirement Age or Termination of Employment.

               1.1.9 "Plan Year" means each twelve-month  period commencing with
          the effective date of this Agreement.

               1.1.10 "Termination for Cause" See Section 5.2.

               1.1.11  "Termination  of  Employment"  means  that the  Executive
          ceases to be employed by the Company for any reason  whatsoever  other
          than by reason of a leave of absence which is approved by the Company.
          For  purposes  of this  Agreement,  if  there  is

                                       2
<PAGE>

          a dispute over the  employment  status of the Executive or the date of
          the Executive's Termination of Employment,  the Company shall have the
          sole and absolute right to decide the dispute.


                                    Article 2
                                Lifetime Benefits

         2.1 Normal  Retirement  Benefit.  Upon  Termination of Employment on or
after the Normal  Retirement Age for reasons other than death, the Company shall
pay to the  Executive  the benefit  described in this Section 2.1 in lieu of any
other benefit under this Agreement.

               2.1.1 Amount of Benefit.  The annual  Normal  Retirement  Benefit
          under this Section 2.1 is $24,000 (twenty-four thousand dollars).  The
          Company may increase the annual  benefit under this Section 2.1 at the
          sole and absolute discretion of the Company's Board of Directors.  Any
          increase in the annual benefit shall require the  recalculation of all
          the amounts on Schedule A attached hereto.  The annual benefit amounts
          on  Schedule  A  are   calculated  by  amortizing  the  annual  normal
          retirement  benefit using the interest  method of accounting,  a 7.50%
          discount rate, monthly compounding and monthly payments.

               2.1.2 Payment of  Benefit.  The  Company  shall  pay  the  annual
          benefit to the Executive in 12 equal monthly  installments  payable on
          the first day of each month  commencing  with the month  following the
          Executive's  Normal  Retirement Date and continuing for 179 additional
          months.

               2.1.3 Benefit Increases.  Commencing on the first  anniversary of
          the  first  benefit   payment,   and  continuing  on  each  subsequent
          anniversary, the Company's Board of Directors, in its sole discretion,
          may increase the benefit.

         2.2 Early  Termination  Benefit.  Upon Early  Termination,  the Company
shall pay to the Executive the benefit  described in this Section 2.2 in lieu of
any other benefit under this Agreement.

               2.2.1 Amount of Benefit. The annual  benefit  under this  Section
          2.2 is the Early  Termination  Annual  Benefit set forth in Schedule A
          for the Plan Year ending  immediately  prior to the Early  Termination
          Date.

               2.2.2 Payment of  Benefit.  The  Company  shall  pay  the  annual
          benefit to the Executive in 12 equal monthly  installments  payable on
          the first day of each month  commencing  with the month  following the
          Executive's  Normal  Retirement  Age and continuing for 179 additional
          months.

               2.2.3 Benefit Increases.  Benefit payments may  be  increased  as
          provided in Section 2.1.3.

                                       3
<PAGE>

         2.3 Disability Benefit. If the Executive  terminates  employment due to
Disability  prior  to  Normal  Retirement  Age,  the  Company  shall  pay to the
Executive the benefit described in this Section 2.3 in lieu of any other benefit
under this Agreement.

               2.3.1 Amount of Benefit. The annual  benefit  under this  Section
          2.3 is the  Disability  Benefit amount set forth in Schedule A for the
          Plan Year ending immediately prior to the date in which Termination of
          Employment occurs.

               2.3.2 Payment of  Benefit.  The  Company  shall  pay  the  annual
          benefit to the Executive in 12 equal monthly  installments  commencing
          within  90 days  after  the  date of the  Executive's  Termination  of
          Employment and continuing for 179 additional months.

               2.3.3 Benefit Increases.  Benefit  payments  may be  increased as
          provided in Section 2.1.3.

         2.4  Change of  Control  Benefit.  If the  Executive  is in the  active
service of the Company at the time of a Change of Control, the Company shall pay
to the Executive the benefit  described in this Section 2.4 in lieu of any other
benefit under this Agreement.

               2.4.1 Amount of Benefit.  The annual  benefit  under this Section
          2.4 is the Normal Retirement Benefit described in Section 2.1.1.

               2.4.2 Payment of  Benefit.  The  Company  shall  pay  the  annual
          benefit to the Executive in 12 equal monthly  installments  payable on
          the first day of each month commencing with the month following Normal
          Retirement Age and continuing for 179 additional months.

               2.4.3 Benefit Increases.  Benefit  payments  may be  increased as
          provided in Section 2.1.3

               2.4.4 Rabbi Trust. Within 10 days of a Change of Control, a rabbi
          trust  shall be  established  and shall at all  times be  funded  with
          assets at least  equal to the present  value of the unpaid  balance of
          the Normal Retirement Benefit. A discount rate no greater then the ten
          year Treasury note shall be used in calculating present value.

               2.4.5 Excise tax Reimbursement.  The Company shall  indemnify and
          hold  the  Executive  harmless  from  any and  all  loss,  expense  or
          liability  that he may ever incur under Code ss. 4999, or a successor,
          as the result of benefits he collects pursuant to this Agreement.

                                       4
<PAGE>

                                    Article 3
                                 Death Benefits

         3.1 Death During Active  Service.  If the  Executive  dies while in the
active  service  of the  Company,  the  Company  shall  pay  to the  Executive's
beneficiary  the benefit  described in this Section 3.1.  This benefit  shall be
paid in lieu of the Lifetime Benefits of Article 2.

              3.1.1 Amount of Benefit. The annual benefit under this Section 3.1
       is the Normal Retirement Benefit described in Section 2.1.1.

              3.1.2 Payment of Benefit. The Company shall pay the annual benefit
       to the beneficiary in 12 equal monthly  installments payable on the first
       day of each month  commencing  with the month  following the  Executive's
       death and continuing for 179 additional months.

         3.2 Death  During  Benefit  Period.  If the  Executive  dies  after the
benefit  payments have commenced  under this Agreement but before  receiving all
such payments,  the Company shall pay the remaining  benefits to the Executive's
beneficiary  at the same time and in the same  amounts they would have been paid
to the Executive had the Executive survived.

         3.3 Death  Following  Termination  of  Employment  But Before  Benefits
Commence.  If the Executive is entitled to benefits  under this  Agreement,  but
dies prior to receiving said benefits,  the Company shall pay to the Executive's
beneficiary the same benefits,  in the same manner, they would have been paid to
the Executive had the Executive  survived;  however,  said benefit payments will
commence upon the Executive's death.


                                    Article 4
                                  Beneficiaries

         4.1   Beneficiary   Designations.   The  Executive  shall  designate  a
beneficiary by filing a written designation with the Company.  The Executive may
revoke  or  modify  the  designation  at any time by  filing a new  designation.
However,  designations  will only be  effective if signed by the  Executive  and
accepted  by the  Company  during  the  Executive's  lifetime.  The  Executive's
beneficiary designation shall be deemed automatically revoked if the beneficiary
predeceases the Executive, or if the Executive names a spouse as beneficiary and
the marriage is  subsequently  dissolved.  If the Executive dies without a valid
beneficiary designation, all payments shall be made to the Executive's estate.

         4.2  Facility  of  Payment.  If a benefit is  payable to a minor,  to a
person  declared  incapacitated,  or  to a  person  incapable  of  handling  the
disposition  of his or her  property,  the Company  may pay such  benefit to the
guardian,  legal  representative  or person  having  the care or custody of such
minor,  incapacitated  person or incapable person. The Company may require proof
of incapacity,  minority or  guardianship  as it may deem  appropriate  prior to
distribution of

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<PAGE>

the benefit.  Such distribution shall completely  discharge the Company from all
liability with respect to such benefit.

                                    Article 5
                               General Limitations

         5.1 Excess Parachute or Golden Parachute Payment.  Notwithstanding  any
provision  of this  Agreement  to the  contrary,  the Company  shall not pay any
benefit  under this  Agreement  to

the extent the benefit would be a prohibited  golden parachute  payment pursuant
to 12  C.F.R.ss.357.2  and for which the appropriate  federal banking agency has
not given written consent to pay pursuant to 12 C.F.R.ss.359.4.

         5.2  Termination  for  Cause.  Notwithstanding  any  provision  of this
Agreement  to the  contrary,  the Company  shall not pay any benefit  under this
Agreement, if the Company terminates the Executives employment for:

               5.2.1 Gross negligence or gross neglect of duties;

               5.2.2 Commission of a felony or of a gross  misdemeanor involving
          moral turpitude; or

               5.2.3 Fraud, disloyalty,  dishonesty or willful  violation of any
          law or  significant  Company policy  committed in connection  with the
          Executive's  employment  and  resulting  in an  adverse  effect on the
          Company.

               5.2.4 Removal. Notwithstanding any provision of this Agreement to
          the  contrary,  the  Company  shall  not pay any  benefit  under  this
          Agreement  if  the   Executive  is  subject  to  a  final  removal  or
          prohibition  order issued by an  appropriate  federal  banking  agency
          pursuant to Section 8(e) of the Federal Deposit Insurance Act.

         5.3 Competition After  Termination of Employment.  No benefits shall be
payable if the  Executive,  without the prior  written  consent of the  Company,
violates the following described restrictive covenants.

               5.3.1 Non-compete Provision.  The  Executive  shall not,  for the
          term of this  Agreement and until all benefits have been  distributed,
          directly or  indirectly,  either as an  individual or as a proprietor,
          stockholder,  partner, officer, director,  employee, agent, consultant
          or independent contractor of any individual, partnership,  corporation
          or other entity  (excluding an ownership  interest of one percent (1%)
          or less in the stock of a publicly traded company):

               (i)  become  employed by,  participate in, or be connected in any
                    manner with the ownership,  management, operation or control
                    of any bank,  savings  and loan or

                                       6
<PAGE>

                    other  similar  financial  institution  if  the  Executive's
                    responsibilities  will  include  providing  banking or other
                    financial services; or

               (ii) participate in any way in hiring or otherwise  engaging,  or
                    assisting  any other person or entity in hiring or otherwise
                    engaging, on a temporary,  part-time or permanent basis, any
                    individual who was employed by the Corporation or any of its
                    subsidiaries  during the three (3) year  period  immediately
                    prior to the termination of the Executive's employment; or

               (iii) assist, advise, or serve in any capacity, representative or
                    otherwise,  any  third  party  in  any  action  against  the
                    Corporation  or  any  of  its  subsidiaries  or  transaction
                    involving the Corporation or any of its subsidiaries; or

               (iv) sell,  offer to sell,  provide  banking  or other  financial
                    services,  assist any other  person in selling or  providing
                    banking or other financial services, or solicit or otherwise
                    compete  for,  either  directly or  indirectly,  any orders,
                    contract,  or accounts for services of a kind or nature like
                    or  substantially  similar  to  the  services  performed  or
                    products sold by the Corporation or any of its  subsidiaries
                    (the preceding hereinafter referred to as "Services"), to or
                    from any  person or entity  from whom the  Executive  or the
                    Corporation or any of its  subsidiaries  provided banking or
                    other financial services, sold, offered to sell or solicited
                    orders,  contracts or accounts for Services during the three
                    (3) year period  immediately prior to the termination of the
                    Executive's employment; or

               (v)  divulge,  disclose,  or  communicate to others in any manner
                    whatsoever,  any confidential information of the Corporation
                    or any of its subsidiaries,  including,  but not limited to,
                    the names and addresses of customers of the  Corporation  or
                    any of its subsidiaries,  as they may have existed from time
                    to  time  or of  any  of  the  Corporation's  or  any of its
                    subsidiaries   prospective  customers,   work  performed  or
                    services  rendered  for  any  customer,  any  method  and/or
                    procedures  relating to projects or other work developed for
                    the  Corporation  or any of its  subsidiaries,  earnings  or
                    other  information  concerning the Corporation or any of its
                    subsidiaries.    The   restrictions    contained   in   this
                    subparagraph  (v)  apply to all  information  regarding  the
                    Corporation  or any of its  subsidiaries,  regardless of the
                    source  who   provided   or   compiled   such   information.
                    Notwithstanding  anything to the contrary,  all  information
                    referred to herein shall not be  disclosed  unless and until
                    it becomes  known to the general  public from sources  other
                    than the Executive.

               5.3.2 Judicial Remedies.  In the event of a breach or  threatened
          breach by the  Executive of any provision of these  restrictions,  the
          Executive  recognizes the substantial and immediate harm that a breach
          or threatened  breach will impose upon the  Corporation  or any of its
          subsidiaries,  and  further  recognizes  that in such  event  monetary
          damages may be inadequate to fully protect the  Corporation  or any of
          its subsidiaries.  Accordingly, in the

                                       7
<PAGE>

          event  of a  breach  or  threatened  breach  of  this  Agreement,  the
          Executive  consents to the  Corporation's  or any of its  subsidiaries
          entitlement to such ex parte, preliminary, interlocutory, temporary or
          permanent  injunctive,  or any other equitable relief,  protecting and
          fully  enforcing the  Corporation' or any of its  subsidiaries  rights
          hereunder and preventing  the Executive from further  breaching any of
          his obligations set forth herein.  The Executive  expressly waives any
          requirement, based on any statute, rule of procedure, or other source,
          that  the  Corporation  or any of its  subsidiaries  post a bond  as a
          condition of obtaining any of the  above-described  remedies.  Nothing
          herein shall be construed as prohibiting the Corporation or any of its
          subsidiaries  from  pursuing  any  other  remedies  available  to  the
          Corporation  or any of its  subsidiaries  at law or in equity for such
          breach or  threatened  breach,  including the recovery of damages from
          the Executive.  The Executive expressly  acknowledges and agrees that:
          (i) the  restrictions  set forth in Section 5.3.1 are  reasonable,  in
          terms of scope,  duration,  geographic  area, and otherwise,  (ii) the
          protections  afforded the  Corporation or any of its  subsidiaries  in
          Section  5.3.1  are  necessary  to  protect  its  legitimate  business
          interest,  (iii) the  restrictions set forth in Section 5.3.1 will not
          be materially adverse to the Executive's  employment with the Company,
          and (iv) his agreement to observe such  restrictions  forms a material
          part of the consideration for this Agreement.

               5.3.3 Overbreadth of Restrictive Covenant. It is the intention of
          the parties  that if any  restrictive  covenant in this  Agreement  is
          determined  by a court of competent  jurisdiction  to be overly broad,
          then the court should enforce such restrictive covenant to the maximum
          extent permitted under the law as to area, breadth and duration.

               5.3.4 The non-compete  provision  detailed in Section 5.3.1 shall
          not be enforceable following a Change of Control.

         5.4  Suicide  or  Misstatement.  No  benefits  shall be  payable if the
Executive commits suicide within two years after the date of this Agreement,  or
if the insurance company denies coverage for material misstatements of fact made
by the Executive on any application for life insurance purchased by the Company,
or any other  reason;  provided,  however  that the Company  shall  evaluate the
reason  for the  denial,  and  upon  advice  of  legal  counsel  and in its sole
discretion, consider judicially challenging any denial.


                                    Article 6
                          Claims and Review Procedures

         6.1 Claims  Procedure.  The Company  shall  notify any person or entity
that makes a claim against the Agreement  (the  "Claimant")  in writing,  within
ninety (90) days of Claimant's written  application for benefits,  of his or her
eligibility or noneligibility  for benefits under the Agreement.  If the Company
determines that the Claimant is not eligible for benefits or full benefits,  the
notice shall set forth (1) the specific reasons for such denial,  (2) a specific
reference

                                       8
<PAGE>

to the  provisions  of the  Agreement  on  which  the  denial  is  based,  (3) a
description of any additional information or material necessary for the Claimant
to perfect his or her claim,  and a description of why it is needed,  and (4) an
explanation of the  Agreement's  claims review  procedure and other  appropriate
information as to the steps to be taken if the Claimant wishes to have the claim
reviewed.  If the  Company  determines  that  there  are  special  circumstances
requiring  additional  time to make a  decision,  the Company  shall  notify the
Claimant  of the  special  circumstances  and the  date by which a  decision  is
expected to be made, and may extend the time for up to an additional  ninety-day
period.

         6.2 Review Procedure.  If the Claimant is determined by the Company not
to be eligible  for  benefits,  or if the  Claimant  believes  that he or she is
entitled  to  greater  or  different  benefits,  the  Claimant  shall  have  the
opportunity  to have such claim reviewed by the Company by filing a petition for
review  with the  Company  within  sixty (60) days  after  receipt of the notice
issued by the Company.  Said petition shall state the specific reasons which the
Claimant  believes  entitle him or her to  benefits  or to greater or  different
benefits.  Within sixty (60) days after  receipt by the Company of the petition,
the Company shall afford the Claimant (and counsel,  if any) an  opportunity  to
present  his or her  position  to the  Company  orally  or in  writing,  and the
Claimant (or counsel)  shall have the right to review the  pertinent  documents.
The Company  shall  notify the  Claimant of its  decision in writing  within the
sixty-day period,  stating specifically the basis of its decision,  written in a
manner  calculated to be understood by the Claimant and the specific  provisions
of the Agreement on which the decision is based.  If,  because of the need for a
hearing,  the sixty-day  period is not sufficient,  the decision may be deferred
for up to another sixty-day period at the election of the Company, but notice of
this deferral shall be given to the Claimant.


                                    Article 7
                           Amendments and Termination

       This Agreement may be amended or terminated  only by a written  agreement
signed by the Company and the Executive.


                                    Article 8
                                  Miscellaneous

                                       9

         8.1 Binding  Effect.  This  Agreement  shall bind the Executive and the
Company,   and   their   beneficiaries,    survivors,   executors,   successors,
administrators and transferees.

         8.2 No Guarantee of  Employment.  This  Agreement is not an  employment
policy  or  contract.  It does not give the  Executive  the  right to  remain an
employee of the  Company,  nor does it  interfere  with the  Company's  right to
discharge  the  Executive.  It also does not require the  Executive to remain an
employee nor interfere with the Executive's right to terminate

                                       9

<PAGE>

employment at any time.

         8.3 Non-Transferability.  Benefits under this Agreement cannot be sold,
transferred, assigned, pledged, attached or encumbered in any manner.

         8.4 Tax  Withholding.  The Company  shall  withhold  any taxes that are
required to be withheld from the benefits provided under this Agreement.

         8.5  Applicable  Law. The Agreement and all rights  hereunder  shall be
governed by the laws of the Commonwealth of  Pennsylvania,  except to the extent
preempted by the laws of the United States of America.

         8.6 Unfunded  Arrangement.  The Executive and  beneficiary  are general
unsecured  creditors  of the  Company  for the  payment of  benefits  under this
Agreement.  The benefits  represent  the mere promise by the Company to pay such
benefits.  The rights to benefits are not subject in any manner to anticipation,
alienation,  sale, transfer,  assignment,  pledge,  encumbrance,  attachment, or
garnishment  by creditors.  Any insurance on the  Executive's  life is a general
asset of the Company to which the Executive and beneficiary have no preferred or
secured claim.

         8.7  Recovery of Estate  Taxes.  If the  Executive's  gross  estate for
federal estate tax purposes  includes any amount  determined by reference to and
on  account  of  this  Agreement,  and if the  beneficiary  is  other  than  the
Executive's  estate,  then the  Executive's  estate shall be entitled to recover
from the beneficiary receiving such benefit under the terms of the Agreement, an
amount by which the total estate tax due by the Executive's estate,  exceeds the
total  estate tax which would have been payable if the value of such benefit had
not been included in the  Executive's  gross  estate.  If there is more than one
person receiving such benefit,  the right of recovery shall be against each such
person. In the event the beneficiary has a liability hereunder,  the beneficiary
may  petition  the Company for a lump sum payment in an amount not to exceed the
beneficiary's liability hereunder.

         8.8 Entire Agreement.  This Agreement  constitutes the entire agreement
between the Company and the Executive as to the subject matter hereof. No rights
are  granted  to the  Executive  by virtue of this  Agreement  other  than those
specifically set forth herein.

         8.9  Administration.  The Company shall have powers which are necessary
to administer this Agreement, including but not limited to:

               8.9.1 Interpreting  the  provisions  of  the   Agreement;

               8.9.2 Establishing  and revising the method of accounting for the
 Agreement;

               8.9.3 Maintaining  a  record  of  benefit  payments;  and

               8.9.4 Establishing rules and  prescribing  any forms necessary or
desirable to administer the Agreement.

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<PAGE>

       IN WITNESS WHEREOF,  the Executive and a duly authorized  Company officer
have signed this Agreement.

EXECUTIVE:                                      COMPANY:
                                                WAYNE BANK

/s/John H. Sanders                              By      /s/William W. Davis, Jr.
------------------------------                          ------------------------
John H. Sanders                                 Title   President & CEO



         By execution  hereof,  Norwood  Financial  consents to and agrees to be
bound by the terms and condition of this Agreement and to guarantee said terms.



ATTEST:                                         CORPORATION:
                                                NORWOOD FINANCIAL

/s/Nancy A. Hart                                By      /s/William W. Davis, Jr.
------------------------------                          ------------------------
Assistant Secretary                             Title   President & CEO


                                       11
<PAGE>

                                   SCHEDULE A
                                   WAYNE BANK
                          SALARY CONTINUATION AGREEMENT

                                LIFETIME BENEFITS

                                 John H. Sanders


                                    Early                          Change of
                                 Termination      Disability        Control
 Plan    Vesting      Accrued    Annual Benefit   Annual Benefit  Annual Benefit
 Year    Schedule     Benefit          (1)              (2)             (1)


   1      100.00%      $4,840        $2,229            $538         $24,000
   2      100.00%     $10,055        $4,297          $1,119         $24,000
   3      100.00%     $15,675        $6,216          $1,744         $24,000
   4      100.00%     $21,732        $7,996          $2,417         $24,000
   5      100.00%     $28,258        $9,649          $3,143         $24,000
   6      100.00%     $35,292       $11,182          $3,926         $24,000
   7      100.00%     $42,871       $12,605          $4,769         $24,000
   8      100.00%     $51,039       $13,926          $5,678         $24,000
   9      100.00%     $59,841       $15,151          $6,657         $24,000
  10      100.00%     $69,326       $16,288          $7,712         $24,000
  11      100.00%     $79,548       $17,343          $8,849         $24,000
  12      100.00%     $90,563       $18,322         $10,074         $24,000
  13      100.00%    $102,433       $19,231         $11,395         $24,000
  14      100.00%    $115,225       $20,074         $12,818         $24,000
  15      100.00%    $129,009       $20,856         $14,351         $24,000
  16      100.00%    $143,864       $21,583         $16,004         $24,000
  17      100.00%    $159,872       $22,256         $17,784         $24,000
  18      100.00%    $177,123       $22,881         $19,703         $24,000
  19      100.00%    $195,714       $23,462         $21,772         $24,000
  20      100.00%    $215,747       $24,000         $24,000         $24,000



(7)      Payments commence at Normal Retirement Age
(8)      Payments commence at Termination of Employment


                                       12
<PAGE>

                             BENEFICIARY DESIGNATION
                                   WAYNE BANK
                          SALARY CONTINUATION AGREEMENT

                                 John H. Sanders


I designate the following as  beneficiary of any death benefits under the Salary
Continuation Agreement:

Primary:     Kathy M. Sanders
             -------------------------------------------------------------------


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

Contingent:  John W. Sanders 50%
             -------------------------------------------------------------------

             Christine M. Sanders 50%
--------------------------------------------------------------------------------

Note: To name a trust as beneficiary,  please provide the name of the trustee(s)
      and the exact name and date of the trust agreement.
              -----

I understand  that I may change these  beneficiary  designations by filing a new
written designation with the Company. I further understand that the designations
will be automatically  revoked if the beneficiary  predeceases me, or, if I have
named my spouse as beneficiary, in the event of the dissolution of our marriage.


Signature   /s/John H. Sanders
            -----------------------------

Date        10/1/99
            -----------------------------


Accepted by the Company this 1st day of October, 1999.
                             ---        -------------


By          William W. Davis, Jr.
            -----------------------------

Title       President & CEO
            -----------------------------


                                       13

</TEXT>
</DOCUMENT>
