EXHIBIT 10.9

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                             NORWOOD FINANCIAL CORP.

                     1999 DIRECTORS STOCK COMPENSATION PLAN


     1.  Purpose of the Plan.  The Plan shall be known as the NORWOOD  FINANCIAL
CORP.  ("Company")  1999 Directors  Stock  Compensation  Plan (the "Plan").  The
purpose of the Plan is to retain and reward qualified personnel for positions of
substantial  responsibility  as members of the Board of Directors of the Company
or any  present or future  parent or  subsidiary  of the  Company to promote the
success of the business.  The Plan is intended to provide for the grant of Stock
Options that are not "Incentive  Stock  Options,"  within the meaning of Section
422 of the Internal Revenue Code of 1986, as amended (the "Code").

     2. Definitions. The following words and phrases when used in this Plan with
an initial capital letter, unless the context clearly indicates otherwise, shall
have the meaning as set forth below. Wherever appropriate, the masculine pronoun
shall include the feminine pronoun and the singular shall include the plural.

     (a) "Award"  means the grant by the  Committee  or in  accordance  with the
terms of the Plan of a Stock Option.

     (b) "Bank" shall mean Wayne Bank, or any successor corporation thereto.

     (c)  "Board"  shall  mean the Board of  Directors  of the  Company,  or any
successor or parent corporation thereto.

     (d) "Change in Control" shall mean any one of the following events: (i) the
acquisition  of ownership,  holding or power to vote more than 25% of the Bank's
or the Company's  voting stock,  (ii) the  acquisition of the ability to control
the election of a majority of the Bank's or the Company's  directors,  (iii) the
acquisition  of a controlling  influence  over the management or policies of the
Bank or the Company 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,  individuals (the "Continuing  Directors")
who at the  beginning  of such period  constitute  the Board of Directors of the
Bank or the Company (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 Bank by the  Company
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.

     (e) "Code" shall mean the Internal  Revenue Code of 1986,  as amended,  and
regulations promulgated thereunder.

     (f)  "Committee"  shall  mean  the  Board  or the  Stock  Option  Committee
appointed by the Board in accordance  with Section 5(a) of the Plan.



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     (g)  "Common  Stock"  shall mean the common  stock of the  Company,  or any
successor or parent corporation thereto.

     (h)  "Company"  shall  mean  the  NORWOOD   FINANCIAL   CORP.,  the  parent
corporation of the Savings Bank, or any successor or Parent thereof.

     (i)  "Director"  shall  mean a member of the Board of the  Company,  or any
successor or parent corporation thereto.

     (j) "Director Emeritus" shall mean a person serving as a director emeritus,
advisory  director,  consulting  director,  or other similar  position as may be
appointed by the Board of Directors of the Savings Bank or the Company from time
to time.

     (k) "Disability"  means any physical or mental impairment which renders the
Participant  incapable of continuing in the employment or service of the Savings
Bank or the Parent in his then current capacity as determined by the Committee.

     (l) "Effective Date" shall mean December 14, 1999.

     (m) "Employee" shall mean any person employed by the Company or any present
or future  Parent or  Subsidiary  of the Company.  "Non-Employee"  shall mean an
individual  not  employed  by the  Company or any  present  or future  Parent or
Subsidiary of the Company.

     (n) "Fair  Market  Value" shall mean the last  reported  sale price of such
Common Stock on such date or within the preceding 20 business  days, or if there
is no reported sale price during such period, then the mean of the last reported
bid and ask price during such period. If no such bid and ask price is available,
then the Fair Market Value shall be determined by the Committee in good faith.

     (o) "Option" or "Stock Option" shall mean an Award granted pursuant to this
Plan  providing  the holder of such  Option  with the right to  purchase  Common
Stock.

     (p) "Optioned Stock" shall mean stock subject to an Option granted pursuant
to the Plan.

     (q)  "Optionee"  shall  mean any  person  who  receives  an Option or Award
pursuant to the Plan.

     (r) "Parent" shall mean any present or future  corporation which would be a
"parent corporation" as defined in Sections 424(e) and (g) of the Code.

     (s)  "Participant"  means any  director  of the  Company  or any  Parent or
Subsidiary of the Company or any other person providing a service to the Company
who is  selected  by the  Committee  to receive an Award,  or who by the express
terms of the Plan is granted an Award.

     (t) "Plan" shall mean the Norwood  Financial  Corp.  1999  Directors  Stock
Compensation Plan.

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     (u) "Share" shall mean one share of the Common Stock.

     (v)  "Subsidiary"  shall  mean any  present  or  future  corporation  which
constitutes a "subsidiary  corporation" as defined in Sections 424(f) and (g) of
the Code.

     3.  Shares  Subject  to the  Plan.  Except  as  otherwise  required  by the
provisions of Section 11 hereof,  the aggregate number of Shares with respect to
which Awards may be made  pursuant to the Plan shall not exceed  17,600  Shares.
Such  Shares  may  either  be from  authorized  but  unissued  shares  or shares
purchased  in the market for Plan  purposes.  If an Award shall  expire,  become
unexercisable,  or be forfeited for any reason prior to its exercise, new Awards
may be granted  under the Plan with  respect to the number of Shares as to which
such expiration has occurred.

     4. Six Month Holding Period. Except in the event of the death or disability
of the Optionee or a Change in Control of the  Company,  a minimum of six months
must elapse  between the date of the grant of an Option and the date of the sale
of the Common Stock received through the exercise of such Option.

     5. Administration of the Plan.
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     (a)  Composition of the Committee.  The Plan shall be  administered  by the
Board of Directors of the Company or a Committee which shall consist of not less
than two  Directors  of the  Company  appointed  by the Board and serving at the
pleasure of the Board. All persons  designated as members of the Committee shall
meet the  requirements of a "Non-Employee  Director"  within the meaning of Rule
16b-3 under the Securities  Exchange Act of 1934, as amended, as found at 17 CFR
ss.240.16b-3. (b) Powers of the Committee. The Committee is authorized (but only
to the  extent  not  contrary  to the  express  provisions  of  the  Plan  or to
resolutions adopted by the Board) to interpret the Plan, to prescribe, amend and
rescind  rules and  regulations  relating to the Plan, to determine the form and
content of Awards to be issued  under the Plan and to make other  determinations
necessary or advisable for the  administration  of the Plan,  and shall have and
may  exercise  such other power and  authority  as may be delegated to it by the
Board from time to time. A majority of the entire  Committee shall  constitute a
quorum and the action of a majority  of the  members  present at any  meeting at
which a quorum is present  shall be deemed the  action of the  Committee.  In no
event may the Committee  revoke  outstanding  Awards  without the consent of the
Participant.

     The President of the Company and such other officers as shall be designated
by the Committee are hereby authorized to execute written agreements  evidencing
Awards  on  behalf  of the  Company  and to cause  them to be  delivered  to the
Participants.  Such agreements  shall set forth the Option  exercise price,  the
number of shares of Common Stock subject to such Option,  the expiration date of
such Options, and such other terms and restrictions  applicable to such Award as
are determined in accordance with the Plan or the actions of the Committee.

     (c) Effect of  Committee's  Decision.  All  decisions,  determinations  and
interpretations  of the Committee  shall be final and  conclusive on all persons
affected thereby.

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          6.      Eligibility for Awards and Limitations.
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     (a) The Committee  shall from time to time determine the  Participants  who
shall be granted Awards under the Plan and the number of Awards to be granted to
each such persons.  In selecting  Participants  and in determining the number of
Shares of Common Stock to be granted to each such Participant, the Committee may
consider the nature of the prior and  anticipated  future  services  rendered by
each  such   Participant,   each  such   Participant's   current  and  potential
contribution  to the Company and such other factors as the Committee may, in its
sole discretion, deem relevant. Participants who have been granted an Award may,
if otherwise eligible, be granted additional Awards.

     (b) In no event shall Shares subject to Options  granted to any Participant
exceed more than 15% of the total number of Shares authorized for delivery under
the Plan.

     7. Term of the Plan.  The Plan shall  continue  in effect for a term of ten
(10) years and 1 day from the Effective  Date,  unless the Plan is terminated by
the Board in accordance with the Plan.

     8. Terms and Conditions of Stock  Options.  Stock Options may be granted or
awarded only to  Participants.  Each Stock Option  granted  pursuant to the Plan
shall be evidenced by an  instrument  in such form as the  Committee  shall from
time to time  approve.  Each Stock  Option  granted  pursuant  to the Plan shall
comply with, and be subject to, the following terms and conditions:

     (a) Option Price. The price per Share at which each Stock Option granted by
the Committee  under the Plan may be exercised  shall not, as to any  particular
Stock Option, be less than the Fair Market Value of the Common Stock on the date
that such Stock Option is granted.

     (b) Payment. Full payment for each Share of Common Stock purchased upon the
exercise of any Stock Option granted under the Plan shall be made at the time of
exercise of each such Stock  Option and shall be paid in cash (in United  States
Dollars),  Common Stock or a combination of cash and Common Stock.  Common Stock
utilized in full or partial payment of the exercise price shall be valued at the
Fair Market  Value at the date of  exercise.  The Company  shall  accept full or
partial payment in Common Stock only to the extent  permitted by applicable law.
No Shares of Common Stock shall be issued  until full payment has been  received
by the Company, and no Optionee shall have any of the rights of a stockholder of
the Company until Shares of Common Stock are issued to the Optionee.

     (c) Term of Stock Option.  The term of  exercisability of each Stock Option
granted pursuant to the Plan shall be not more than ten (10) years from the date
each such Stock Option is granted.

     (d) Cashless Exercise.  Subject to vesting requirements,  if applicable, an
Optionee  who has held an Stock Option for at least six months may engage in the
"cashless exercise" of the Option.  Upon a cashless exercise,  an Optionee shall
give the Company  written notice of the exercise of the Option  together with an
order to a registered  broker-dealer  or equivalent third party, to sell part or
all of the Optioned  Stock and to deliver  enough of the proceeds to the Company
to pay the Option  exercise price and any applicable  withholding  taxes. If the
Optionee does not sell the Optioned Stock through a registered  broker-dealer or
equivalent  third party, the Optionee can give the Company written notice of the
exercise of the Option and the third party purchaser of the Optioned Stock shall
pay the Option  exercise  price  plus any  applicable  withholding  taxes to the
Company.


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     (e) Transferability.  An Stock Option granted pursuant to the Plan shall be
exercised  during an  Optionee's  lifetime  only by the  Optionee to whom it was
granted and shall not be assignable or transferable otherwise than by will or by
the laws of descent and distribution.

     9. Awards to Directors. As of the close of business on the day of the first
regularly  scheduled  Board  meeting in December of each year,  Stock Options to
purchase shares of Common Stock shall be granted to each  Non-employee  Director
of the Company or the Bank then serving as of such date and annually  thereafter
("Date of Grant").  Such Options  shall be  exercisable  at a price equal to the
Fair Market Value of the Common  Stock as of the date of grant of such  Options.
Such Options will be first  exercisable  as of the one year  anniversary of such
Date of Grant.  Except as  limited by Section  10  hereof,  such  Options  shall
continue to be  exercisable  for a period of ten years and one day following the
date  of  grant.  Unless  otherwise  inapplicable,   or  inconsistent  with  the
provisions of this paragraph,  the Options to be granted to Directors  hereunder
shall be subject to all other  provisions of this Plan. The number of options to
be awarded to each Director shall be determined by the Committee.


     10.  Effect of  Termination  of Service,  Disability  or Death on Incentive
Stock Options.


     (a) Termination of Service. In the event that any Optionee's  employment or
other  service  provided  to the  Company  or the Bank shall  terminate  for any
reason,  other than  Permanent and Total  Disability (as such term is defined in
Section 22(e)(3) of the Code) or death, all of any such Optionee's Options,  and
all of any such Optionee's  rights to purchase or receive Shares of Common Stock
pursuant  thereto,  shall  automatically  terminate  on the  earlier  of (i) the
respective  expiration  dates of any such Option or (ii) the  expiration  of not
more than three (3) months  after the date of such  termination  as  director or
such service,  but only if, and to the extent that, the Optionee was entitled to
exercise  any such  option  at the  date of such  termination.  In the  event of
removal in accordance with the Company's or the Bank's Articles of Incorporation
or Bylaws, as the case may be, the Option shall  automatically  terminate on the
date of such termination.

     (b)  Disability.  In the event that any  Optionee's  directorship  or other
service  with the  Company  or the Bank  shall  terminate  as the  result of the
Permanent and Total Disability of such Optionee,  such Optionee may exercise any
Options  granted to him pursuant to the Plan at any time prior to the earlier of
(i) the respective  expiration  dates of any such Options or (ii) the date which
is six (6) months  after the date of such  termination,  but only if, and to the
extent that,  the Optionee was entitled to exercise any such Options at the date
of such termination.

     (c) Death. In the event of the death of an Optionee, any Options granted to
such  Optionee may be exercised by the person or persons to whom the  Optionee's
rights  under  any  such  Options  pass by will or by the  laws of  descent  and
distribution   (including   the   Optionee's   estate   during   the  period  of
administration)  at  any  time  prior  to the  earlier  of  (i)  the  respective
expiration  dates of any such  Options  or (ii) the date which is six (6) months
after the date of death of such  Optionee  but only if, and to the extent  that,
the Optionee was entitled to exercise any such Options at the date of death. For
purposes  of this  Section  10(c),  any  Option  held by an  Optionee  shall  be
considered  exercisable  at the  date  of his  death  if  the  only  unsatisfied
condition precedent to the exercisability of such Option at the date of death is
the passage of a specified  period of time. At the  discretion of the Committee,
upon  exercise of such  Options in the event of death,  such persons may receive
Shares or cash or combination  thereof. If cash shall be paid in lieu of Shares,
such cash shall be equal to the difference between the fair market value of such
Shares  and the  exercise  price  of such  Options  on the  exercise  date.


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     11.  Withholding  Tax. The Company  shall have the right to deduct from all
amounts paid in cash with respect to the cashless  exercise of Options under the
Plan  any  taxes  required  by law to be  withheld  with  respect  to such  cash
payments.  Where a  Participant  or other  person is entitled to receive  Shares
pursuant  to the  exercise  of an Option,  the  Company  shall have the right to
require the  Participant  or such other  person to pay the Company the amount of
any taxes which the Company is required to withhold with respect to such Shares,
or, in lieu  thereof,  to retain,  or to sell without  notice,  a number of such
Shares sufficient to cover the amount required to be withheld.

     12. Recapitalization,  Merger,  Consolidation,  Change in Control and Other
Transactions.

     (a) Adjustment.  Subject to any required action by the  stockholders of the
Company,  within the sole discretion of the Committee,  the aggregate  number of
Shares of Common Stock for which Options may be granted hereunder, the number of
Shares of Common  Stock  covered by each  outstanding  Option,  and the exercise
price  per  Share  of  Common   Stock  of  each  such   Option,   shall  all  be
proportionately  adjusted  for any  increase or decrease in the number of issued
and  outstanding  Shares  of  Common  Stock  resulting  from  a  subdivision  or
consolidation   of  Shares   (whether   by  reason  of  merger,   consolidation,
recapitalization,   reclassification,   split-up,   combination  of  shares,  or
otherwise) or the payment of a stock  dividend (but only on the Common Stock) or
any other  increase or  decrease  in the number of such  Shares of Common  Stock
effected  without the receipt or payment of  consideration by the Company (other
than Shares held by dissenting stockholders).

     (b) Change in Control.  All  outstanding  Awards shall  become  immediately
exercisable in the event of a Change in Control of the Company, as determined by
the Committee.  In the event of such a Change in Control,  the Committee and the
Board  of  Directors  will  take  one or more  of the  following  actions  to be
effective as of the date of such Change in Control:

     (i) provide that such Options shall be assumed, or equivalent options shall
be   substituted,   ("Substitute   Options")  by  the  acquiring  or  succeeding
corporation  (or an  affiliate  thereof),  provided  that:  the  shares of stock
issuable  upon  the  exercise  of  such  Substitute   Options  shall  constitute
securities registered in accordance with the Securities Act of 1933, as amended,
("1933  Act") or such  securities  shall be  exempt  from such  registration  in
accordance  with  Sections  3(a)(2) or  3(a)(5) of the 1933 Act,  (collectively,
"Registered Securities"), or in the alternative, if the securities issuable upon
the  exercise  of  such  Substitute  Options  shall  not  constitute  Registered
Securities,  then the Optionee will receive upon  consummation  of the Change in
Control  transaction  a cash  payment for each Option  surrendered  equal to the
difference between (1) the Fair Market Value of the consideration to be received
for each share of Common  Stock in the Change in Control  transaction  times the
number of shares of Common Stock subject to such  surrendered  Options,  and (2)
the aggregate exercise price of all such surrendered Options, or

     (ii) in the event of a transaction  under the terms of which the holders of
the Common Stock of the Company will  receive upon  consummation  thereof a cash
payment  (the "Merger  Price") for each share of Common  Stock  exchanged in the
Change in Control  transaction,  to make or to provide for a cash payment to the
Optionees equal to the difference  between (A) the Merger Price times the number
of shares of Common Stock  subject to such Options held by each Optionee (to the
extent then exercisable at prices not in excess of the Merger Price) and (B) the
aggregate  exercise price of all such  surrendered  Options in exchange for such
surrendered Options.


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     (c) Extraordinary  Corporate Action.  Notwithstanding any provisions of the
Plan to the contrary,  subject to any required action by the stockholders of the
Company,  in the  event of any  Change  in  Control,  recapitalization,  merger,
consolidation,  exchange  of Shares,  spin-off,  reorganization,  tender  offer,
partial or  complete  liquidation  or other  extraordinary  corporate  action or
event,  the Committee,  in its sole discretion,  shall have the power,  prior or
subsequent to such action or event to:

     (i)  appropriately  adjust the number of Shares of Common Stock  subject to
each  Option,  the  Option  exercise  price per Share of Common  Stock,  and the
consideration  to be given or received by the Company  upon the  exercise of any
outstanding Option;

     (ii)  cancel  any  or  all  previously   granted  Options,   provided  that
appropriate  consideration  is paid to the  Optionee  in  connection  therewith;
and/or

     (iii)  make  such  other  adjustments  in  connection  with the Plan as the
Committee, in its sole discretion,  deems necessary,  desirable,  appropriate or
advisable.

     (d)  Acceleration.  The  Committee  shall at all  times  have the  power to
accelerate the exercise date of Options previously granted under the Plan.

     (e) Non-recurring Dividends. Upon the payment of a special or non-recurring
cash  dividend  that has the effect of a return of capital to the  stockholders,
the Option exercise price per share shall be adjusted  proportionately and in an
equitable manner.

     Except as expressly  provided in Sections 12(a), 12(b) and 12(e) hereof, no
Optionee  shall have any rights by reason of the occurrence of any of the events
described in this Section 12.

     13. Time of Granting Options. The date of grant of an Option under the Plan
shall,  for all purposes,  be the date specified in accordance  with the Plan or
the date on which the Committee makes the determination of granting such Option.
Notice of the grant of an Option  shall be given to each  individual  to whom an
Option is so granted within a reasonable  time after the date of such grant in a
form determined by the Committee.

     14.  Modification of Options.  At any time and from time to time, the Board
may authorize  the Committee to direct the execution of an instrument  providing
for the modification of any outstanding  Option,  provided no such modification,
extension  or renewal  shall  confer on the  holder of said  Option any right or
benefit  which  could not be  conferred  on the  Optionee  by the grant of a new
Option at such time, or shall not materially  decrease the  Optionee's  benefits
under the Option  without  the  consent of the holder of the  Option,  except as
otherwise permitted under Section 15 hereof.

     15. Amendment and Termination of the Plan.

     (a) Action by the Board.  The Board may alter,  suspend or discontinue  the
Plan.

     (b) Change in Applicable Law. Notwithstanding any other provision contained
in the Plan,  in the  event of a change in any  federal  or state  law,  rule or
regulation  which  would  make  the  exercise  of all or part of any  previously
granted Option unlawful or subject the Company to any penalty,


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the Committee may restrict any such exercise without the consent of the Optionee
or other holder thereof in order to comply with any such law, rule or regulation
or to avoid any such penalty.

     16.  Conditions  Upon Issuance of Shares;  Limitations on Option  Exercise;
Cancellation of Option Rights.

     (a) Shares shall not be issued with respect to any Option granted under the
Plan unless the  issuance  and  delivery of such  Shares  shall  comply with all
relevant  provisions of  applicable  law,  including,  without  limitation,  the
Securities  Act of 1933,  as  amended,  the  rules and  regulations  promulgated
thereunder,  any applicable  state  securities laws and the  requirements of any
stock exchange upon which the Shares may then be listed.

     (b) The  inability of the Company to obtain any  necessary  authorizations,
approvals  or letters of  non-objection  from any  regulatory  body or authority
deemed by the Company's  counsel to be necessary to the lawful issuance and sale
of any Shares issuable hereunder shall relieve the Company of any liability with
respect to the non-issuance or sale of such Shares.

     (c) As a condition  to the  exercise of an Option,  the Company may require
the person exercising the Option to make such  representations and warranties as
may  be  necessary  to  assure  the   availability  of  an  exemption  from  the
registration requirements of federal or state securities law.

     (d) Notwithstanding  anything herein to the contrary,  upon the termination
of employment or service of an Optionee by the Company or its  Subsidiaries  for
"cause"  within the sole  discretion  of the  Board,  all  Options  held by such
Participant  shall cease to be exercisable as of the date of such termination of
employment or service.

     (e) Upon the  exercise  of an  Option  by an  Optionee  (or the  Optionee's
personal  representative),  the Committee,  in its sole and absolute discretion,
may make a cash  payment to the  Optionee,  in whole or in part,  in lieu of the
delivery  of shares of Common  Stock.  Such cash  payment  to be paid in lieu of
delivery  of Common  Stock  shall be equal to the  difference  between  the Fair
Market  Value of the  Common  Stock on the date of the Option  exercise  and the
exercise  price per share of the Option.  Such cash payment shall be in exchange
for the cancellation of such Option.  Such cash payment shall not be made in the
event that such  transaction  would  result in  liability to the Optionee or the
Company under Section 16(b) of the Securities  Exchange Act of 1934, as amended,
and regulations promulgated thereunder.

     17.  Reservation  of Shares.  During the term of the Plan, the Company will
reserve  and keep  available  a number  of  Shares  sufficient  to  satisfy  the
requirements of the Plan.

     18.  Unsecured  Obligation.  No  Participant  under the Plan shall have any
interest  in any fund or special  asset of the  Company by reason of the Plan or
the grant of any  Option  under the Plan.  No trust  fund  shall be  created  in
connection with the Plan or any grant of any Option hereunder and there shall be
no required funding of amounts which may become payable to any Participant.


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     19. No Employment Rights. No Director,  Employee or other person shall have
a right to be selected as a Participant under the Plan. Neither the Plan nor any
action taken by the Committee in  administration  of the Plan shall be construed
as giving any  person any rights of  employment  or  retention  as an  Employee,
Director or in any other  capacity  with the Company,  the Savings Bank or other
Subsidiaries.

     20.  Governing  Law.  The  Plan  shall  be  governed  by and  construed  in
accordance  with the laws of the  Commonwealth  of  Pennsylvania,  except to the
extent that federal law shall be deemed to apply.