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                                                                   Exhibit 10.16

                                    EXHIBIT A

                        CONFIDENTIAL SEPARATION AGREEMENT
                               AND GENERAL RELEASE

         THIS AGREEMENT, made and entered into on this ______ day of
___________, 2003 by and between Waypoint Financial Corp., a Pennsylvania
corporation (the "Company"), with its principal office in Harrisburg,
Pennsylvania, and David E. Zuern, a resident of Pennsylvania ("Executive").

                                   WITNESSETH:

         WHEREAS, the Company had heretofore employed Executive under an
Employment Agreement originally entered into as of _______________________, 2003
(the "Employment Agreement); and

         WHEREAS, Executive has terminated employment and the Employment
Agreement has been terminated as of _____________________________, and

         WHEREAS, the Company and Executive wish to enter into an agreement to
provide for a mutual release as to any claims including, without limitation,
claims that might be asserted by Executive under the Employment Agreement and
the Age Discrimination in Employment Act, as further described herein, and
reaffirm Executive's right to indemnification for actions taken within the scope
of his employment.

         NOW, THEREFORE, in consideration of the mutual promises contained
herein, the parties hereto, intending to be legally bound, hereby agree as
follows:

         1.       The Company and Executive hereby agree that Executive's
                  termination of employment shall be effective on
                  ________________ and that the Employment Agreement, except as
                  otherwise provided therein as to obligations that continue
                  beyond its term, shall terminate on that date.

         2.       Notwithstanding Executive's termination of employment and the
                  termination of the Employment Agreement, in consideration of
                  the release provided by Executive under paragraph 6 below, the
                  Company shall pay or cause to be paid or provided to
                  Executive, subject to applicable employment and income tax
                  withholdings and deductions, all amounts and benefits required
                  under Section 5.4 of the Employment Agreement.

         3.       Executive agrees and acknowledges that the Company, on a
                  timely basis, has paid, or has agreed to pay, to Executive all
                  other amounts due and owing based on his prior services in
                  accordance with the terms of the Employment Agreement and that
                  the Company has no obligation, contractual or otherwise to
                  Executive, except as provided herein, nor does it have any
                  obligation to hire, rehire or re-employ Executive in the
                  future.


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         4.       Executive agrees and reaffirms that the provisions of the
                  Employment Agreement relating to Confidential Information
                  shall continue to apply notwithstanding the termination of
                  Executive's employment and the termination of the Employment
                  Agreement, and that the Company shall be entitled to all
                  remedies available under Section 4 of the Employment Agreement
                  in enforcing its rights hereunder as well as under Section 2
                  of the Employment Agreement.

         5.       Executive further agrees and reaffirms that Section 3 of the
                  Employment Agreement, as to Non-Competition, shall continue to
                  apply notwithstanding the termination of Executive's
                  employment and the termination of the Employment Agreement,
                  and that the Company shall be entitled to all remedies
                  available under Section 4 of the Employment Agreement in
                  enforcing its rights hereunder as well as under Section 3 of
                  the Employment Agreement.

         6.       In full and complete settlement of any claims that Executive
                  may have against the Company, including any possible
                  violations of the Age Discrimination in Employment Act, 29
                  U.S.C. '621 et. seq. ("ADEA"), in connection with his
                  termination of employment, and for and in consideration of the
                  undertakings of the Company described herein, Executive does
                  hereby REMISE, RELEASE, AND FOREVER DISCHARGE the Company, and
                  each of its subsidiaries and affiliates, their officers,
                  directors, shareholders, partners, employees and agents, and
                  their respective successors and assigns, heirs, executors and
                  administrators (hereinafter all included within the term "the
                  Company"), of and from any and all manner of actions and
                  causes of actions, suits, debts, claims and demands whatsoever
                  in law or in equity, which he ever had, now has, or hereafter
                  may have, or which Executive's heirs, executors or
                  administrators hereafter may have, by reason of any matter,
                  cause or thing whatsoever from the beginning of Executive's
                  employment to the date of this Agreement; and particularly,
                  but without limitation of the foregoing general terms, any
                  claims arising from or relating in any way to Executive's
                  employment relationship or the Employment Agreement and his
                  termination from that employment relationship and the
                  termination of the Employment Agreement, including but not
                  limited to, any claims which have been asserted, could have
                  been asserted, or could be asserted now or in the future under
                  any federal, state or local laws, including any claims under
                  ADEA, Title VII of the Civil Rights Act of 1964, as amended,
                  42 U.S.C. '2000e et. seq. ("Title VII"), the Employee
                  Retirement Income Security Act, the Americans with
                  Disabilities Act, the family and Medical Leave Act, the Fair
                  Labor Standards Act, the Age Discrimination in Employment Act,
                  the Older Workers Benefit Protection Act, the Pennsylvania
                  Human Relations Act, the Pennsylvania Wage Payment and
                  Collection Law,ss.ss. 1981-1988 of Title 42 of the U.S.C., the
                  Immigration Reform and Control Act, the National Labor
                  Relations Act, the Employee Retirement Income Security Act of
                  1974, as amended ("ERISA"), the Rehabilitation Act of 1973,
                  the Americans with Disabilities Act, the Family and Medical
                  Leave Act, Section 11(c) of the Occupational Safety and Health
                  Act, and any common law claims now or hereafter recognized and
                  all


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                  claims for counsel fees and costs; provided, however, that
                  nothing herein shall preclude Executive from joining the
                  Company, and the Company shall defend Executive, in any action
                  brought against and for which he would have been indemnified
                  pursuant to the bylaws of the Company as of the date hereof,
                  unless later limited in accordance with applicable law, or
                  under applicable law (in which case he shall notify the
                  Company within five business days after receiving service of
                  process as to the commencement of the action and give the
                  Company the right to control the defense of any such action).
                  Notwithstanding the foregoing, nothing contained herein shall
                  prevent Executive from requiring the Company to fulfill its
                  obligations hereunder, under the Employment Agreement or under
                  any employee benefit plan, as defined in Section 3(3) of
                  ERISA, maintained by the Company and in which Executive
                  participated.

         7.       Executive further agrees and covenants that neither he, nor
                  any person, organization or other entity on his behalf, will
                  file, charge, claim, sue or cause or permit to be filed,
                  charged, or claimed, any action for personal equitable or
                  monetary or other similar relief against the Company,
                  involving any matter occurring at any time in the past up to
                  and including the date of this Agreement, or involving any
                  continuing effects of any actions or practices which may have
                  arisen or occurred prior to the date of this Agreement,
                  including any charge of discrimination under ADEA, Title VII,
                  the Workers' Compensation Act or state of local laws. In the
                  event that Executive breaches his undertakings under this
                  Agreement, then the Company will be relieved of all further
                  obligations owed hereunder and he will forfeit all monies paid
                  to him and the value of the benefits due under Section 5.4 of
                  the Employment Agreement.

         8.       In full and complete settlement of any claims that the Company
                  may have against Executive, other than the fulfillment of
                  Executive's obligations hereunder or his remaining obligations
                  under the Employment Agreement as provided in Sections 4 and 5
                  above, and for and in consideration of the undertakings of
                  Executive described herein, the Company does hereby REMISE,
                  RELEASE, AND FOREVER DISCHARGE Executive and his heirs,
                  executors and administrators (hereinafter all included within
                  the term "Executive"), of and from any and all manner of
                  actions and causes of actions, suits, debts, claims and
                  demands whatsoever in law or in equity, which the Company ever
                  had, now has, or hereafter may have, by reason of any matter,
                  cause or thing whatsoever within the scope of Executive's
                  employment by the Company from the beginning of Executive's
                  employment with the Company to the date of this Agreement; and
                  particularly, but without limitation of the foregoing general
                  terms, any claims arising from or relating in any way to
                  actions taken by Executive within the scope of his employment
                  relationship or pursuant to the Employment Agreement and the
                  termination of that employment relationship with the Company
                  and of the Employment Agreement.

         9.       The Company further agrees and covenants that neither it, nor
                  any person, organization or other entity on its behalf, will
                  file, charge, claim, sue or cause or


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                  permit to be filed, charged, or claimed, any action for
                  damages, including injunctive, declaratory, monetary or other
                  relief against Executive, involving any matter occurring at
                  any time in the past up to the date of this Agreement, or
                  involving any continuing effects of any actions or practices
                  which may have arisen or occurred prior to the date of this
                  Agreement so long as Executive meets all of his obligations
                  under this Agreement and the Employment Agreement. In the
                  event that the Company breaches its undertakings under this
                  Agreement, then Executive will be relieved of all further
                  obligations owed hereunder.

         10.      Executive hereby agrees and acknowledges that under this
                  Agreement, the Company has agreed to provide him with
                  compensation and benefits that are in addition to any amounts
                  to which he otherwise would have been entitled under the
                  Employment Agreement or otherwise in the absence of this
                  Agreement, and that such additional compensation is sufficient
                  to support the covenants and agreements by Executive herein.

         11.      Executive further agrees and acknowledges that the
                  undertakings of the Company as provided in this Agreement are
                  made to provide an amicable conclusion of Executive's
                  employment by the Company and, further, that Executive will
                  not require the Company to publicize anything to the contrary.
                  Executive and the Company, its officers and directors, will
                  not, disparage the name, business reputation or business
                  practices of the other. In addition, by signing this
                  Agreement, Executive agrees not to pursue any internal
                  grievance with the Company.

         12.      Executive hereby certifies that he has read the terms of this
                  Agreement, that he has been advised by the Company to consult
                  with an attorney and that he understands its terms and
                  effects. Executive acknowledges further that he is executing
                  this Agreement of his own violation, without any threat,
                  duress or coercion and with a full understanding of its terms
                  and effects and with the intention, as expressed in Section 6
                  hereof, of releasing all claims recited herein in exchange for
                  the consideration described herein, which he acknowledges is
                  adequate and satisfactory to him provided the Company meets
                  all of its obligations under this Agreement. The Company has
                  made no representations to Executive concerning the terms or
                  effects of this Agreement other than those contained in this
                  Agreement.

         13.      Executive hereby acknowledges that he was presented with this
                  Agreement on ________________________, and that he was
                  informed that he had the right to consider this Agreement and
                  the release contained herein for a period of twenty-one (21)
                  days prior to execution. Executive also understands that he
                  has the right to revoke this Agreement for a period of seven
                  (7) days following execution, by giving written notice to the
                  Company at 235 N. Second Street, Harrisburg, PA 17101,
                  Attention: Chairman, Compensation and Benefits Committee, in
                  which event the provisions of this Agreement shall be null and
                  void, and the parties shall have the rights, duties,
                  obligations and remedies afforded by applicable law.

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         14.      Executive and the Company agree that if any part of this
                  Agreement is determined to be invalid, illegal or otherwise
                  unenforceable, the remaining provisions of this Agreement
                  shall not be affected and will remain in full force and
                  effect.

         15.      Executive agrees that he will not in any way communicate the
                  terms of this Agreement to any person other than his immediate
                  family, attorney or financial advisor unless compelled by law
                  or administrative proceeding to do so.

         16.      This Agreement shall be interpreted and enforced under the
                  laws of the Commonwealth of Pennsylvania.



         IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the day and year first above written.

          ATTEST:                           WAYPOINT FINANCIAL CORP.



         ________________________________   By: ________________________________
         Secretary                                 Charles C. Pearson, Jr.
                                            Title:  Chairman of the Board

         WITNESS:                           EXECUTIVE:



         -------------------------------    -----------------------------------
                                                    David E. Zuern


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