WAYNE SAVINGS BANK, F.S.B.
                             EMPLOYMENT AGREEMENT

      This AGREEMENT is made effective as of ________________, by and among
Wayne Savings Bank, F.S.B. (the "Institution"), a federally chartered savings
bank, with its principal administrative office at 1195 Hamburg Turnpike, Wayne,
New Jersey, Wayne Bancorp, Inc., a corporation organized under the laws of the
State of Delaware, the holding company for the Institution (the "Holding
Company"), and Johanna O'Connell ("Executive").

      WHEREAS, the Institution wishes to assure itself of the services of
Executive for the period provided in this Agreement; and

      WHEREAS, Executive is willing to serve in the employ of the Institution on
a full-time basis for said period.

      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 her employment hereunder, Executive agrees to serve
as President and Chief Executive Officer of the Institution. Executive shall
render administrative and management services to the Institution such as are
customarily performed by persons situated in a similar executive capacity and
such duties as are from time to time assigned to her by the Board of Directors.
During said period, Executive also agrees to serve, if appointed, as an officer
of the Holding Company or any subsidiary of the Institution and, if elected,
shall serve as a director of the Institution and the Holding Company; provided
that, Executive shall only serve as a director of the Institution and the
Holding Company so long as the Executive continues to serve full-time as
President and Chief Executive Officer of the Institution and President of the
Holding Company.

2.    TERMS AND DUTIES.

      (a) The period of Executive's employment under this Agreement shall be
deemed to have commenced as of the date first above written and shall continue
for a period of thirty-six (36) full calendar months thereafter. Commencing on
the first anniversary date of this Agreement, and continuing on each anniversary
thereafter, the disinterested members of the board of directors of the
Institution ("Board") may extend the Agreement for an additional year such that
the remaining term of the Agreement shall be three (3) years unless the
Executive elects not to extend the term of this Agreement by giving written
notice in accordance with Section 8 of this Agreement. The Board will review the
Agreement and Executive's performance annually for purposes of determining
whether to extend the Agreement and the rationale and results thereof shall be
included in the minutes of the Board's meeting. The Board shall give notice to
the Executive as soon as possible after such review as to whether the Agreement
is to be extended.



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      (b) During the period of Executive's employment hereunder, except for
periods of absence occasioned by illness, reasonable vacation periods, and
reasonable leaves of absence, Executive shall devote substantially all her
business time, attention, skill, and efforts to the faithful performance of her
duties hereunder including activities and services related to the organization,
operation and management of the Institution and participation in community and
civic organizations; provided, however, that, with the approval of the Board, as
evidenced by a resolution of such Board, from time to time, Executive may serve,
or continue to serve, on the boards of directors of, and hold any other offices
or positions in, companies or organizations, which, in such Board's judgment,
will not present any conflict of interest with the Institution, or materially
affect the performance of Executive's duties pursuant to this Agreement.

      (c) Notwithstanding anything herein to the contrary, Executive's
employment with the Institution may be terminated by the Institution or the
Executive during the term of this Agreement, subject to the terms and conditions
of this Agreement.

3.    COMPENSATION AND REIMBURSEMENT.

      (a) The Institution shall pay Executive as compensation a salary of not
less than $125,000 per year ("Base Salary"). Base Salary shall include any
amounts of compensation deferred by Executive under any qualified or unqualified
plan maintained by the Institution. Such Base Salary shall be payable bi-weekly.
During the period of this Agreement, Executive's Base Salary shall be reviewed
at least annually; the first such review will be made no later than one year
from the date of this Agreement. Such review shall be conducted by the Board or
by a Committee of the Board, delegated such responsibility by the Board. The
Board may by resolution increase Executive's Base Salary. Any increase in Base
Salary shall become the "Base Salary" for purposes of this Agreement. In
addition to the Base Salary provided in this Section 3(a), the Institution shall
also provide Executive, at no premium cost to Executive, with all such other
benefits as are provided uniformly to permanent full-time employees of the
Institution.

      (b) The Executive shall be entitled to participate in any 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 Institution will not,
without Executive's prior written consent, make any changes in such plans,
arrangements or perquisites which would materially adversely affect Executive's
rights or benefits thereunder; except to the extent such changes are made
applicable to all Institution employees on a non-discriminatory basis. Without
limiting the generality of the foregoing provisions of this Subsection (b),
Executive shall 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 plans, medical coverage or any other employee benefit plan
or arrangement made available by the Institution in the future to its senior
executives and key management employees, subject to and on a basis consistent
with the terms, conditions and overall administration of such plans and
arrangements. Executive shall be entitled to incentive compensation and bonuses
as provided in any plan of the Institution in which Executive is eligible to
participate. Nothing paid to the


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Executive under any such plan or arrangement will be deemed to be in lieu of
other compensation to which the Executive is entitled under this Agreement.

      (c) In addition to the Base Salary provided for by paragraph (a) of this
Section 3 and other compensation provided for by paragraph (b) of this Section
3, the Institution shall pay or reimburse Executive for all reasonable travel
and other reasonable expenses incurred in the performance of Executive's
obligations under this Agreement and may provide such additional compensation in
such form and such amounts as the Board may from time to time determine.

4.    PAYMENTS TO EXECUTIVE UPON AN EVENT OF TERMINATION.

      (a) Upon the occurrence of an Event of Termination (as herein defined)
during the 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 Institution or the Holding Company of Executive's full-time
employment hereunder for any reason other than a termination governed by Section
5(a) hereof, or Termination for Cause, as defined in Section 7 hereof; (ii)
Executive's resignation from the Institution's employ upon any (A) failure to
elect or reelect or to appoint or reappoint Executive as President and Chief
Executive Officer, unless consented to by the Executive, (B) 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 attributes thereof described in Section 1, above,
coupled with a material reduction in the benefits and perquisites being provided
to Executive immediately preceding the change in Executive's functions, duties
or responsibilities, unless consented to by Executive, (C) a relocation of
Executive's principal place of employment by more than 15 miles from its
location at the effective date of this Agreement, unless consented to by the
Executive, (D) a material reduction in the benefits and perquisites to the
Executive from those being provided as of the effective date of this Agreement,
unless consented to by the Executive, or (E) a liquidation or dissolution of the
Institution or Holding Company, or (F) breach of this Agreement by the
Institution or Holding Company. Upon the occurrence of any event described in
clauses (A), (B), (C), (D), (E) or (F), above, Executive shall have the right to
elect to terminate her employment under this Agreement by resignation upon not
less than sixty (60) days prior written notice given within six full months
after the event giving rise to said right to elect.

      (b) Upon the occurrence of an Event of Termination, on the Date of
Termination, as defined in Section 8, the Institution shall be obligated to pay
Executive, or, in the event of her subsequent death, her beneficiary or
beneficiaries, or her estate, as the case may be, an amount equal to the sum of:
(i) the amount of the remaining payments that the Executive would have earned if
she had continued her employment with the Institution during the remaining term
of this Agreement at the Executive's Base Salary at the Date of Termination; and
(ii) the amount equal to the annual contributions that would have been made on
Executive's behalf to any employee benefit plans of the Institution or the
Holding Company during the remaining term of this Agreement based on
contributions made (on an annualized basis) at the Date of Termination;
provided, however, that any payments pursuant to this subsection and subsection
4(c) below shall not, in the aggregate, exceed three times Executive's average
annual compensation for the five


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most recent taxable years that Executive has been employed by the Institution or
such lesser number of years in the event that Executive shall have been employed
by the Institution for less than five years. In the event the Institution is not
in compliance with its minimum capital requirements or if such payments pursuant
to this subsection (b) would cause the Institution's capital to be reduced below
its minimum regulatory capital requirements, such payments shall be deferred
until such time as the Institution or successor thereto is in capital
compliance. At the election of the Executive, which election is to be made prior
to an Event of Termination, such payments shall be made in a lump sum as of the
Executive's Date of Termination. In the event that no election is made, payment
to Executive will be made on a monthly basis in approximately equal installments
during the remaining term of the Agreement. Such payments shall not be reduced
in the event the Executive obtains other employment following termination of
employment.

      (c) Upon the occurrence of an Event of Termination, the Institution will
cause to be continued life, medical and disability coverage substantially
identical to the coverage maintained by the Institution or the Holding Company
for Executive prior to her termination at no premium cost to the Executive,
except to the extent such coverage may be changed in its application to all
Institution or Holding Company employees. Such coverage shall cease upon the
expiration of the remaining term of this Agreement.

5.    CHANGE IN CONTROL.

      (a) For purposes of this Agreement, a "Change in Control" of the
Institution or Holding Company shall mean an event of a nature that: (i) would
be required to be reported in response to Item 1 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, as amended (the "Exchange Act"); or (ii)
results in a Change in Control of the Institution or the Holding Company within
the meaning of the Home Owners' Loan Act of 1933, as amended, the Federal
Deposit Insurance Act and the Rules and Regulations promulgated by the Office of
Thrift Supervision ("OTS") (or its predecessor agency), as in effect on the date
hereof (provided, that in applying the definition of change in control as set
forth under the rules and regulations of the OTS, the Board shall substitute its
judgment for that of the OTS); or (iii) without limitation such a Change in
Control shall be deemed to have occurred at such time as (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 voting securities of the Institution or the Holding
Company representing 25% or more of the Institution's or the Holding Company's
outstanding voting securities or right to acquire such securities except for any
voting securities of the Institution purchased by the Holding Company and any
voting securities purchased by any employee benefit plan of the Institution or
the Holding Company, 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 Holding Company's stockholders was approved by the same Nominating
Committee serving under an Incumbent Board, shall be, for purposes of this
clause (B), considered as though he were


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a member of the Incumbent Board, or (C) a plan of reorganization, merger,
consolidation, sale of all or substantially all the assets of the Institution or
the Holding Company or similar transaction occurs in which the Institution or
Holding Company is not the resulting entity; provided, however, that such an
event listed above will be deemed to have occurred or to have been effectuated
upon the receipt of all required regulatory approvals not including the lapse of
any statutory waiting periods.

      (b) If a Change in Control has occurred pursuant to Section 5(a) or the
Board has determined that a Change in Control has occurred, Executive shall be
entitled to the benefits provided in paragraphs (c), and (d) of this Section 5
upon her subsequent termination of employment at any time during the term of
this Agreement due to: (1) Executive's dismissal or (2) Executive's voluntary
resignation following any demotion, loss of title, office or significant
authority or responsibility, coupled with a reduction in the compensation and
benefits being received by Executive immediately preceding the change in
Executive's functions, duties or responsibilities, or any material reduction in
annual compensation or benefits or relocation of her principal place of
employment by more than 15 miles from its location immediately prior to the
Change in Control, unless such termination is because of her death, disability,
retirement or termination for Cause.

      (c) Upon Executive's entitlement to benefits pursuant to Section 5(b), the
Institution shall pay Executive, or in the event of her subsequent death, her
beneficiary or beneficiaries, or her estate, as the case may be, a sum equal to
the greater of: (1) the payments due for the remaining term of the Agreement; or
(2) three (3) times Executive's average annual compensation for the five (5)
most recent taxable years that Executive has been employed by the Institution or
such lesser number of years in the event that Executive shall have been employed
by the Institution for less than five (5) years. Such average annual
compensation shall include Base Salary, commissions, bonuses, contributions on
Executive's behalf to any pension and/or profit sharing plan, severance
payments, retirement payments, directors or committee fees, fringe benefits paid
or to be paid to the Executive in any such year, and payment of any expense
items without accountability or business purpose or that do not meet the
Internal Revenue Service requirements for deductibility by the Institution;
provided however, that any payment under this provision and subsection 5(d)
below shall not exceed three (3) times the Executive's average annual
compensation. In the event the Institution is not in compliance with its minimum
capital requirements or if such payments would cause the Institution's capital
to be reduced below its minimum regulatory capital requirements, such payments
shall be deferred until such time as the Institution or successor thereto is in
capital compliance. At the election of the Executive, which election is to be
made prior to a Change in Control, such payment may be made in a lump sum as of
the Executive's Date of Termination. In the event that no election is made,
payment to the Executive will be made in approximately equal installments on a
monthly basis over a period of thirty-six (36) months following the Executive's
termination. Such payments shall not be reduced in the event Executive obtains
other employment following termination of employment.

      (d) Upon the Executive's entitlement to benefits pursuant to Section 5(b),
the Institution will cause to be continued life, medical and disability coverage
substantially identical to the coverage maintained by the Institution for
Executive prior to her severance at no premium


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cost to the Executive, except to the extent that such coverage may be changed in
its application for all Institution employees on a non-discriminatory basis.
Such coverage and payments shall cease upon the expiration of thirty-six (36)
months following the Date of Termination.

6.    CHANGE OF CONTROL RELATED PROVISIONS

      Notwithstanding the provisions of Section 5, in no event shall the
aggregate payments or benefits to be made or afforded to Executive under said
paragraphs (the "Termination Benefits") constitute an "excess parachute payment"
under Section 280G of the Code or any successor thereto, and in order to avoid
such a result, Termination Benefits will be reduced, if necessary, to an amount
(the "Non-Triggering Amount"), the value of which is one dollar ($1.00) less
than an amount equal to three (3) times Executive's "base amount", as determined
in accordance with said Section 280G. The allocation of the reduction required
hereby among the Termination Benefits provided by Section 5 shall be determined
by Executive.

7.    TERMINATION FOR CAUSE.

      The term "Termination for Cause" shall include termination because of
Executive's personal dishonesty, incompetence, willful misconduct, any breach of
fiduciary duty involving personal profit, intentional failure to perform stated
duties, willful violation of any law, rule or regulation (other than traffic
violations or similar offenses) or final cease-and-desist order or material
breach of any provision of this Agreement. Notwithstanding the foregoing,
Executive shall not be deemed to have been Terminated for Cause unless and until
there shall have been delivered to her a Notice of Termination which shall
include a copy of a resolution duly adopted by the affirmative vote of not less
than a majority of the members of the Board at a meeting of the Board called and
held for that purpose (after reasonable notice to Executive and an opportunity
for her, together with counsel, to be heard before the Board), finding that in
the good faith opinion of the Board, Executive was guilty of conduct justifying
Termination for Cause and specifying the particulars thereof in detail. The
Executive shall not have the right to receive compensation or other benefits for
any period after Date of Termination for Cause. During the period beginning on
the date of the Notice of Termination for Cause pursuant to Section 8 hereof
through the Date of Termination for Cause, stock options and related limited
rights granted to Executive under any stock option plan shall not be exercisable
nor shall any unvested awards granted to Executive under any stock benefit plan
of the Institution, the Holding Company or any subsidiary or affiliate thereof,
vest. At the Date of Termination for Cause, such stock options and related
limited rights and such unvested awards shall become null and void and shall not
be exercisable by or delivered to Executive at any time subsequent to such
Termination for Cause.

8.    NOTICE.

      (a) Any purported termination by the Institution or by Executive shall be
communicated by Notice of Termination to the other party hereto. 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


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detail the facts and circumstances claimed to provide a basis for termination of
Executive's employment under the provision so indicated.

      (b) "Date of Termination" shall mean the date specified in the Notice of
Termination (which, in the case of a Termination for Cause, shall not be less
than thirty days from the date such Notice of Termination is given).

      (c) If, within thirty (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 Date of Termination shall be the
date on which the dispute is finally determined, either by mutual written
agreement of the parties, by a binding arbitration award, or by a final
judgment, order or decree of a court of competent jurisdiction (the time for
appeal therefrom having expired and no appeal having been perfected) and
provided further that the Date of Termination shall be extended by a notice of
dispute only if such notice is given in good faith and the party giving such
notice pursues the resolution of such dispute with reasonable diligence.
Notwithstanding the pendency of any such dispute, in the event the Executive is
terminated for reasons other than Termination for Cause, the Institution will
continue to pay Executive her Base Salary in effect when the notice giving rise
to the dispute was given until the earlier of: (1) the resolution of the dispute
in accordance with this Agreement or (2) the expiration of the remaining term of
this Agreement as determined as of the Date of Termination. Amounts paid under
this Section are in addition to all other amounts due under this Agreement and
shall not be offset against or reduce any other amounts due under this
Agreement.

9.    POST-TERMINATION OBLIGATIONS.

      All payments and benefits to Executive under this Agreement shall be
subject to Executive's compliance with this Section 9 for one (1) full year
after the earlier of the expiration of this Agreement or termination of
Executive's employment with the Institution. Executive shall, upon reasonable
notice, furnish such information and assistance to the Institution as may
reasonably be required by the Institution in connection with any litigation in
which it or any of its subsidiaries or affiliates is, or may become, a party.

10.   NON-COMPETITION.

      (a) Upon any termination of Executive's employment hereunder pursuant to
Section 4 hereof, Executive agrees not to compete with the Institution for a
period of one (1) year following such termination in any city, town or county in
which the Executive's normal business office is located and the Institution has
an office or has filed an application for regulatory approval to establish an
office, determined as of the effective date of such termination, except as
agreed to pursuant to a resolution duly adopted by the Board. Executive agrees
that during such period and within said cities, towns and counties, Executive
shall not work for or advise, consult or otherwise serve with, directly or
indirectly, any entity whose business materially competes with the depository,
lending or other business activities of the Institution. The parties hereto,
recognizing that irreparable injury will result to the Institution, its business
and property in the event of Executive's breach of this Subsection 10(a) agree
that in the event of any such


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breach by Executive, the Institution will be entitled, in addition to any other
remedies and damages available, to an injunction to restrain the violation
hereof by Executive, Executive's partners, agents, servants, employees and all
persons acting for or under the direction of Executive. Nothing herein will be
construed as prohibiting the Institution from pursuing any other remedies
available to the Institution for such breach or threatened breach, including the
recovery of damages from Executive.

      (b) Executive recognizes and acknowledges that the knowledge of the
business activities and plans for business activities of the Institution and
affiliates thereof, as it may exist from time to time, is a valuable, special
and unique asset of the business of the Institution. Executive will not, during
or after the term of her employment, disclose any knowledge of the past,
present, planned or considered business activities of the Institution or
affiliates thereof to any person, firm, corporation, or other entity for any
reason or purpose whatsoever. Notwithstanding the foregoing, Executive may
disclose any knowledge of banking, financial and/or economic principles,
concepts or ideas which are not solely and exclusively derived from the business
plans and activities of the Institution. Further, Executive may disclose
information regarding the business activities of the Institution to the OTS and
the Federal Deposit Insurance Corporation ("FDIC") pursuant to a formal
regulatory request. In the event of a breach or threatened breach by Executive
of the provisions of this Section, the Institution will be entitled to an
injunction restraining Executive from disclosing, in whole or in part, the
knowledge of the past, present, planned or considered business activities of the
Institution or affiliates thereof, or from rendering any services to any person,
firm, corporation, or other entity to whom such knowledge, in whole or in part,
has been disclosed or is threatened to be disclosed. Nothing herein will be
construed as prohibiting the Institution from pursuing any other remedies
available to the Institution for such breach or threatened breach, including the
recovery of damages from Executive.

11.   SOURCE OF PAYMENTS.

      (a) All payments provided in this Agreement shall be timely paid in cash
or check from the general funds of the Institution. The Holding Company,
however, unconditionally guarantees payment and provision of all amounts and
benefits due hereunder to Executive and, if such amounts and benefits due from
the Institution are not timely paid or provided by the Institution, such amounts
and benefits shall be paid or provided by the Holding Company.

      (b) Notwithstanding any provision herein to the contrary, to the extent
that payments and benefits, as provided by this Agreement, are paid to or
received by Executive under the Employment Agreement dated __________, 1996,
between Executive and the Holding Company, such compensation payments and
benefits paid by the Holding Company will be subtracted from any amounts due
simultaneously to Executive under similar provisions of this Agreement. Payments
pursuant to this Agreement and the Holding Company Agreement shall be allocated
in proportion to the services rendered and time expended on such activities by
Executive as determined by the Holding Company and the Institution on a
quarterly basis.


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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 Institution or
any predecessor of the Institution 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 her without reference to this Agreement.

13.   NO ATTACHMENT.

      (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 affect 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 Institution and their respective successors and assigns.

14.   MODIFICATION AND WAIVER.

      (a) This Agreement may not be modified or amended except by an instrument
in writing signed by the parties hereto.

      (b) No term or condition of this Agreement shall be deemed to have been
waived, nor shall there be any estoppel against the enforcement of any provision
of this Agreement, except by written instrument of the party charged with such
waiver or estoppel. No such written waiver shall be deemed a continuing waiver
unless specifically stated therein, and each such waiver shall operate only as
to the specific term or condition waived and shall not constitute a waiver of
such term or condition for the future as to any act other than that specifically
waived.

15.   REQUIRED PROVISIONS.

      (a) The Institution may terminate Executive's employment at any time, but
any termination by the Institution, other than Termination for Cause, shall not
prejudice Executive's right to compensation or other benefits under this
Agreement. Executive shall not have the right to receive compensation or other
benefits for any period after Termination for Cause as defined in Section 7
hereinabove.

      (b) If Executive is suspended from office and/or temporarily prohibited
from participating in the conduct of the Institution's affairs by a notice
served under Section 8(e)(3) or 8(g)(1) of the Federal Deposit Insurance Act, 12
U.S.C. ss.1818(e)(3) or (g)(1), the Institution's obligations under this
contract shall be suspended as of the date of service, unless stayed by
appropriate proceedings. If the charges in the notice are dismissed, the
Institution may in its


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discretion: (i) pay Executive all or part of the compensation withheld while
their contract obligations were suspended; and (ii) reinstate (in whole or in
part) any of the obligations which were suspended.

      (c) If Executive is removed and/or permanently prohibited from
participating in the conduct of the Institution's affairs by an order issued
under Section 8(e)(4) or 8(g)(1) of the Federal Deposit Insurance Act, 12 U.S.C.
ss.1818(e)(4) or (g)(1), all obligations of the Institution under this contract
shall terminate as of the effective date of the order, but vested rights of the
contracting parties shall not be affected.

      (d) If the Institution is in default as defined in Section 3(x)(1) of the
Federal Deposit Insurance Act, 12 U.S.C. ss.1813(x)(1) all obligations of the
Institution under this contract shall terminate as of the date of default, but
this paragraph shall not affect any vested rights of the contracting parties.

      (e) All obligations of the Institution under this contract shall be
terminated, except to the extent determined that continuation of the contract is
necessary for the continued operation of the institution: (i) by the Director of
the OTS (or her designee), or the FDIC at the time the FDIC enters into an
agreement to provide assistance to or on behalf of the Institution under the
authority contained in Section 13(c) of the Federal Deposit Insurance Act, 12
U.S.C. ss.1823(c); or (ii) by the Director of the OTS (or her designee) at the
time the Director (or her designee) approves a supervisory merger to resolve
problems related to the operations of the Institution or when the Institution 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) Any payments made to Executive pursuant to this Agreement, or
otherwise, are subject to and conditioned upon compliance with 12 U.S.C.
ss.1828(k) and 12 C.F.R. ss.545.121 and any rules and regulations promulgated
thereunder.

16.   REINSTATEMENT OF BENEFITS UNDER SECTION 15(b).

      In the event Executive is suspended and/or temporarily prohibited from
participating in the conduct of the Institution's affairs by a notice described
in Section 15(b) hereof (the "Notice") during the term of this Agreement and a
Change in Control, as defined herein, occurs, the Holding Company will assume
its obligation to pay and Executive will be entitled to receive all of the
termination benefits provided for under Section 5 of this Agreement upon the
Holding Company's receipt of a dismissal of charges in the Notice.

17.   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.


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18.   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.

19.   GOVERNING LAW.

      The validity, interpretation, performance and enforcement of this
Agreement shall be governed by the laws of the State of New Jersey, but only to
the extent not superseded by federal law.

20.   ARBITRATION.

      Any dispute or controversy arising under or in connection with this
Agreement shall be settled exclusively by arbitration, conducted before a panel
of three arbitrators sitting in a location selected by Executive within fifty
(50) miles from the location of the Institution, 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 her 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.

      In the event any dispute or controversy arising under or in connection
with Executive's termination is resolved in favor of Executive, whether by
judgment, arbitration or settlement, Executive shall be entitled to the payment
of all back-pay, including salary, bonuses and any other cash compensation,
fringe benefits and any compensation and benefits due Executive under this
Agreement.

21.   PAYMENT OF COSTS AND LEGAL FEES.

      All reasonable costs and legal fees paid or incurred by Executive pursuant
to any dispute or question of interpretation relating to this Agreement shall be
paid or reimbursed by the Institution if Executive is successful on the merits
pursuant to a legal judgment, arbitration or settlement.

22.   INDEMNIFICATION.

      (a) The Institution shall provide Executive (including her heirs,
executors and administrators) with coverage under a standard directors' and
officers' liability insurance policy at its expense, or in lieu thereof, shall
indemnify Executive (and her heirs, executors and administrators) as permitted
under federal law against all expenses and liabilities reasonably incurred by
her in connection with or arising out of any action, suit or proceeding in which
she may be involved by reason of her having been a director or officer of the
Institution (whether or not she continues to be a director or officer at the
time of incurring such expenses or liabilities),


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<PAGE>



such expenses and liabilities to include, but not be limited to, judgments,
court costs and attorneys' fees and the cost of reasonable settlements.

      (b) Any payments made to Executive pursuant to this Section are subject to
and conditioned upon compliance with 12 C.F.R. ss.545.121 and any rules or
regulations promulgated thereunder.

23.   SUCCESSOR TO THE INSTITUTION.

      The Institution shall require any successor or assignee, whether direct or
indirect, by purchase, merger, consolidation or otherwise, to all or
substantially all the business or assets of the Institution or the Holding
Company, expressly and unconditionally to assume and agree to perform the
Institution's obligations under this Agreement, in the same manner and to the
same extent that the Institution would be required to perform if no such
succession or assignment had taken place.


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<PAGE>


                                  SIGNATURES

      IN WITNESS WHEREOF, Wayne Savings Bank, F.S.B. and Wayne Bancorp, Inc.
have caused this Agreement to be executed and their seals to be affixed hereunto
by their duly authorized officers and directors, and Executive has signed this
Agreement, on the _____ day of _________________, 1997.


ATTEST:                                   WAYNE SAVINGS BANK, F.S.B.


                                          BY:
--------------------------                   ---------------------------------
Secretary                                       Chief Executive Officer


      [SEAL]


ATTEST:                                   WAYNE BANCORP, INC.
                                              (Guarantor)


                                          BY:
--------------------------                   ---------------------------------
Secretary                                       Chairman of the Board


      [SEAL]


WITNESS:


--------------------------                   ---------------------------------
                                                Executive


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