This statement relates
to the shares of Common Stock of WAYNE SAVINGS BANCSHARES, INC. The address of the issuer is 151 North Market Street Wooster, Ohio 44691.
This statement is filed on behalf of Ancora Advisors, LLC. Ancora Advisors, LLC is registered as an investment advisor
with the SEC under the Investment Advisors Act, as amended. Ancora Advisors, LLC is the investment advisor to the Ancora Trust,
which includes the Ancora Income Fund, Ancora Equity Fund, Ancora Special Opportunity Fund, Ancora/Thelen Small-Mid Cap Fund,
and Ancora MicroCap Fund (Ancora Family of Mutual Funds), which are registered with the SEC as investment companies under
the Investment Company Act, as amended. The address of the principal office of Ancora Advisors, LLC is 6060 Parkland Boulevard, Suite 200, Cleveland, Ohio 44124.
Ancora Advisors, LLC has the power to dispose of the shares owned by the investment clients for which it acts as advisor,
including Merlin Partners, the AAMAF LP, Birchwald Partners LP, Ancora Catalyst Fund LP and the Ancora Family of Mutual Funds. Ancora Advisors disclaims beneficial
ownership of such shares, except to the extent of its pecuniary interest therein.
During the last five years the Reporting Person has not been convicted in a criminal proceeding, nor been a party to a
civil proceeding of a judicial or administrative body of competent jurisdiction, as a result of which he was or is subject
to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal
or state securities laws or finding any violation with respect to such laws.
The Reporting Persons purchased the Shares based on the Reporting Persons' belief that the Shares, when purchased, were undervalued
and represented an attractive investment opportunity. Depending upon overall market conditions, other investment opportunities
available to the Reporting Persons, and the availability of Shares at prices that would make the purchase or sale of Shares
desirable, the Reporting Persons may endeavor to increase or decrease their position in the Issuer through, among other things,
the purchase or sale of Shares on the open market or in private transactions or otherwise, on such terms and at such times
as the Reporting Persons may deem advisable.
On November 21, 2017, Ancora Advisors, LLC, Merlin Partners, AAMAF LP, Ancora
Catalyst Fund LP and Brian Hopkins (collectively, the "Ancora Parties") entered into an agreement with the Issuer (the "Agreement"),
pursuant to which, among other things, the Issuer agreed (a) to expand its Board of Directors to seven members on January
25, 2018 and to appoint Brian Hopkins as a director of the Issuer to serve in the class of directors with terms expiring at
the conclusion of the Issuer's 2020 annual meeting of stockholders, (b) that its Board of Directors will cause the Board of
Directors of Wayne Community Bank (the "Bank") to expand the Bank's Board of Directors to seven members and to appoint Mr.
Hopkins to the Bank's Board of Directors in December 2017 for a term to expire in 2020, and (c) that its Board of Directors
will consult with Mr. Hopkins regarding his appointment to one or more committees of the Board of Directors of each of the
Issuer and the Bank. Mr. Hopkins agreed to promptly submit his resignation as a member of the Board of Directors of each of
the Issuer and the Bank at the end of his initial term, upon request of the Board of Directors of the Issuer after the termination
of the Agreement, or at such earlier time that the beneficial ownership of the Ancora Parties decreases below 1% of the outstanding
shares of the Issuer's stock, upon request of the Board of Directors of the Issuer. Pursuant to the Agreement, the Ancora
Parties agreed to certain voting commitments until the close of business on the date of the Issuer's 2019 annual meeting and
to certain customary standstill provisions until the close of business on the date of the Issuer's 2020 annual meeting. The
foregoing summary of the Agreement does not purport to be complete and is qualified in its entirety by reference to the full
text of the Agreement, a copy of which is attached as Exhibit B hereto and is incorporated herein by reference.
No Reporting
Person has any present plan or proposal which would relate to or result in any of the matters set forth in subparagraphs (a)
- (j) of Item 4 of Schedule 13D except as set forth herein or such as would occur upon or in connection with completion of,
or following, any of the actions discussed herein. The Reporting Persons intend to review their investment in the Issuer on
a continuing basis. Depending on various factors including, without limitation, the Issuer's financial position and investment
strategy, the price levels of the Shares, conditions in the securities markets and general economic and industry conditions,
the Reporting Persons may in the future take such actions with respect to their investment in the Issuer as they deem appropriate
including, without limitation, continuing to engage in communications with management and the Board of Directors of the Issuer,
engaging in discussions with stockholders of the Issuer or other third parties about the Issuer and the Reporting Persons'
investment, making recommendations or proposals to the Issuer concerning changes to the capitalization, ownership structure
or board structure (including board composition), purchasing additional Shares, selling some or all of their Shares, engaging
in short selling of or any hedging or similar transaction with respect to the Shares, including swaps and other derivative
instruments, or changing their intention with respect to any and all matters referred to in Item 4.
Item 6. Contracts, Arrangements,
Understandings or Relationships with Respect to Securities of the Issuer.
Other than as described herein, there are no contracts, arrangements, understandings or relationships among the Reporting
Persons, or between the Reporting Persons and any other person, with respect to the securities of the Issuer. On November 21, 2017, the Ancora Parties and the Issuer entered into the Agreement as defined and described in Item 4 above
and attached as Exhibit B hereto.
Agreement, dated as of November 21, 2017, by and among Wayne Savings Bancshares, Inc., Ancora Advisors, LLC, Merlin Partners,
AAMAF LP, Ancora Catalyst Fund LP and Brian Hopkins.
Exhibit B:
"The STANDSTILL Agreement”
STANDSTILL AGREEMENT
This Standstill Agreement (this "Agreement") is made by and between Wayne Savings Bancshares, Inc. ("Wayne") on the one hand, and Ancora Advisors, LLC ("Ancora Advisors"), Merlin Partners, AAMAF LP, Ancora Catalyst Fund LP and Brian Hopkins (collectively, the "Ancora Parties" and individually a "Member" of the Ancora Parties), on the other hand, on behalf of themselves and their respective affiliates (Wayne and the Ancora Parties together, collectively, the "Parties"). In consideration of the covenants, promises and undertakings set forth herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows:
1. Board Expansion and Membership
On January 25, 2018 the Board of Directors of Wayne ("Board") will be expanded from its
present six-member size to seven members, and Mr. Brian R. Hopkins will be appointed a director of Wayne to serve in the class
of directors with terms expiring at the conclusion of Wayne's 2020 annual meeting of stockholders. Mr. Hopkins' service on
the Board will commence at the January 25, 2018 meeting of the Board subject to the execution of the Agreement. While Mr.
Hopkins serves as a director of the Board, Mr. Hopkins shall receive compensation (including equity based compensation, if
any) for the Board and committee meetings attended and benefits (including expense reimbursement) on the same basis as all
other non-employee directors of Wayne.
On November 21, 2017, the Board of Directors of Wayne will cause the Board of Directors of Wayne Community Bank (the "Bank")
to expand the Bank's Board of Directors ("Bank Board") to seven members and to appoint Mr. Hopkins to fill the vacancy created
by the expansion of the Bank's Board of Directors for a term to expire at the annual meeting of the Bank's sole shareholder
to be held in 2020. Hopkins' service on the Bank's Board will commence at the December, 2017 meeting of the Bank's Board subject
to the execution of the Agreement. While Mr. Hopkins serves as a director of the Bank's Board, Mr. Hopkins shall receive compensation
(including equity based compensation, if any) for the Board and committee meetings attended and benefits (including expense
reimbursements) on the same basis as all other non-employee directors of the Bank.
Upon the appointment of Mr. Hopkins to the Board and, thereafter, upon the reasonable request of Mr. Hopkins, the Board shall
consult with Mr. Hopkins regarding the appointment of Mr. Hopkins to one or more committees of each of the Board and the Bank
Board, with the understanding that the intent of the Parties is that Mr. Hopkins or any substitute for Mr. Hopkins pursuant
to Section 4 hereof (the "Substitute") shall be considered for membership on committees of the Board and the Bank Board in
a similar manner to other members of the Board and the Bank Board.
In the event Mr. Hopkins or the Substitute resigns from the Wayne Board, such resignation shall also be considered a resignation
from the Bank Board. Similarly, if Mr. Hopkins or the Substitute resigns from the Bank Board, such resignation shall also
be considered a resignation from the Wayne Board.
Mr. Hopkins or the Substitute, as the case may be, agrees to promptly submit his resignation as a member of the Board of Directors
of each of Wayne and the Bank at the end of his initial term on the board, upon request of the Board of Directors of Wayne
after the termination of this Agreement pursuant to Section 15 hereof, or at such earlier time that the beneficial ownership
of the Ancora Parties decreases below 1% of the outstanding shares of Wayne stock, upon request of the Board of Directors
of Wayne. Nothing in this agreement shall be preventative of the Board of Directors of Wayne re-nominating Mr. Hopkins or
a Substitute for another term on the Board of Directors of Wayne at the 2020 annual meeting.
Except as otherwise set forth in this Section 1, at all times while serving as a member of the Board or the Bank Board, Mr.
Hopkins or the Substitute, as the case may be, agrees to comply with all policies, procedures, processes, codes, rules, standards
and guidelines applicable to members of the Board or the Bank Board (as each may be amended from time to time for all directors),
including, but not limited to all such policies procedures, processes, codes, rules, standards and guidelines pertaining to
confidentiality. Upon the request of Mr. Hopkins or the Substitute, Wayne shall make available to Mr. Hopkins or the Substitute
copies of all such policies, procedures, processes, codes, rules, standards and guidelines that are in writing and in effect
as of the date of such request.
Except as otherwise authorized herein, at all times while Mr. Hopkins or the Substitute is serving as a member of the Board
or the Bank Board and thereafter, (i) Mr. Hopkins or the Substitute shall not disclose to the Ancora parties, any member or
any "affiliate" or "associate" (as defined in Rule 12b-2 promulgated by the Securities and Exchange Commission ("SEC") pursuant
to the Securities Exchange Act of 1934, as amended (the "Exchange Act")) of each such Member of the Ancora Parties (collectively
and individually the "Ancora Affiliates") or any other person or entity not affiliated with Wayne or the Bank, any confidential
information of Wayne or the Bank, and (ii) each Member of the Ancora Parties shall not, and shall cause the Ancora Affiliates
not to seek to obtain confidential information of Wayne or the Bank from Mr. Hopkins or the Substitute; provided, however,
that this restriction shall not prohibit Mr. Hopkins or the Substitute from discussing material non-public information (MNPI)
with members of Ancora so long as such individuals agree to be bound by all applicable policies of Wayne and the Bank pertaining
to confidential information, and with the Non-Disclosure Agreement dated March 21, 2017 ("NDA"), a copy of which is attached
hereto as Ex. A, and incorporated herein. It is understood and agreed that Mr. Hopkins or the Substitute shall be responsible
for any failure of the members of Ancora to comply with such policies and the NDA. It is further understood and agreed that
Mr. Hopkins, the Substitute and other Ancora personnel who receive MNPI may be restricted from trading Wayne stock as a result
of their possession of MNPI, and shall not be excused from their obligations to maintain the confidentiality of the MNPI.
2. Standstill
The Ancora Parties each agree that during the Standstill Period (as hereinafter defined), the Ancora Parties,
any Member and the Ancora Affiliates will inform Wayne and the Bank via verbal or email communication to the Chief Executive
Officer or Chair of the Board of any transactions they enter into involving Wayne stock, within 5 business days of such transaction
occurring, and will not (and they will not assist or encourage others to), directly or indirectly, in any manner, without
prior written approval of the Board of Directors of Wayne:
(i) acquire, offer or propose to acquire, solicit an offer to sell or agree to acquire directly or indirectly, alone or in
concert with others, by purchase, gift, tender, exchange or otherwise, any direct or indirect beneficial ownership (within
the meaning of Rule 13d-3 under the Exchange Act) or any direct or indirect interest in any securities or direct or indirect
rights, warrants or options to acquire, or securities convertible into or exchangeable for (collectively, an "Acquisition"),
any securities of Wayne, such that as a result of such Acquisition, the Ancora Parties would maintain beneficial ownership
in excess of 9.99% of the outstanding shares of Wayne common stock;
(ii) make, engage in, advise, encourage, influence or in any way participate in, directly or indirectly, alone or in concert
with others, any "solicitation" of "proxies" or consents to vote against the recommendations or directives of the incumbent
Board of Directors (as such terms are used in the proxy rules of the SEC promulgated pursuant to Section 14 of the Exchange
Act);
(iii) form, join, encourage, influence, advise or in any way participate in a "group" within the meaning of Section 13(d)(3)
of the Exchange Act (other than a group involving solely the Ancora Parties) with respect to any voting securities of Wayne
or otherwise in any manner agree, attempt, seek or propose to deposit any securities of Wayne in any voting trust or similar
arrangement, or subject any securities of Wayne to any arrangement or agreement with respect to the voting thereof (other
than any such voting trust, arrangement or agreement solely among the Ancora Parties) except as expressly set forth in this
Agreement;
(iv) acquire, offer or propose to acquire or agree to acquire, directly or indirectly, alone or in concert with others, by
purchase, tender, exchange or otherwise, (a) any of the assets, tangible and intangible, direct or indirect, of Wayne or (b)
direct or indirect rights, warrants or options to acquire any assets of Wayne;
(v) otherwise act, alone or in concert with others, to propose or to seek to offer to Wayne or any of its stockholders any
business combination, restructuring , recapitalization or similar transaction to or with Wayne or the Bank or otherwise seek,
alone or in concert with others, to control or change the management, Board of Directors or policies of Wayne or the Bank,
to propose or seek any amendment, waiver or modification of the articles of incorporation or bylaws of Wayne, to nominate
any person as a director of Wayne who is not nominated by the then incumbent directors (provided that if there is a vacancy
on the Wayne Board of Directors the Ancora Parties may submit suggestions on a confidential basis to the Wayne Board of Directors
or the Nominating Committee of the Wayne Board of Directors for nominees to the Board pursuant to the nomination policies
and procedures adopted by the Board), or propose any matter to be voted upon by the stockholders of Wayne. Notwithstanding
the above, in the event of inbound interest in a business combination between Wayne and another institution, Mr. Hopkins may
communicate such interest to the Board of Directors of Wayne;
(vi) knowingly sell, transfer or otherwise dispose of any interest in the shares of Wayne stock beneficially owned by any
of the Ancora Parties or Members thereof to any person that would reasonably be understood to be hostile toward Wayne or the
Bank and their respective plans;
(vii) except in connection with the enforcement of this Agreement, or passive participation
as a class member in any class action (which for avoidance of doubt, shall not include participation as a named or lead plaintiff)
with respect to any event or circumstance occurring prior to the date of this Agreement, initiate or participate, by encouragement
or otherwise, in any litigation against Wayne or the Bank or their respective directors or officers, or in any derivative
litigation on behalf of Wayne, except for testimony which may be required by law;
(viii) announce the intention to do, or
enter into any arrangement or understanding with others to do, or advise, assist or encourage others to do, any of the actions
restricted or prohibited herein, publicly announce or disclose any request to be excused from any of the forgoing obligations,
or otherwise take or cause any action or make any statement inconsistent with any of the foregoing.
At any Wayne annual meeting of stockholders during the Standstill Period, the Ancora Parties and Members thereof agree: (1)
to vote all shares of Wayne they or any of them beneficially own in favor of the nominees for election or reelection as director
of Wayne selected by the Board of Directors of Wayne and agree otherwise to support such director candidates, and (2) with
respect to any other proposal submitted by any Wayne stockholder to a vote of the Wayne stockholders, to vote all of the Wayne
shares they beneficially own in accordance with the recommendation of the Wayne Board of Directors with respect to any such
stockholder proposal (the agreement set forth in this paragraph shall hereinafter be referred to as the "Voting Agreement.").
Notwithstanding anything in this Agreement to the contrary, nothing herein will be construed to limit or affect any action
or inaction by Mr. Hopkins or the Substitute in his capacity as a member of Wayne's Board of Directors or the Bank's Board
of Directors, provided he acts in good faith in the discharge of his fiduciary duties as a Board member.
The "Standstill Period"
shall begin as of the date of this Agreement and shall remain in full force and effect until the close of business on the
date of the 2020 annual meeting, with the exception of the Voting Agreement, which shall remain in full force and effect from
the date of this Agreement until the close of business on the date of the 2019 annual meeting.
3. Non-Disparagement
During the Standstill Period (through and including the close of business of the date of the 2020 annual
meeting) the Ancora Parties agree not to disparage Wayne or any officers, directors (including director nominees and former
directors) or current or former employees of Wayne or its affiliates or subsidiaries in any public or quasi-public forum,
and Wayne agrees not to disparage any of the Ancora Parties or any Member, officers, partners or employees of the Ancora Parties
in any public or quasi-public forum.
4. Ancora Nominees
Wayne agrees that if either Mr. Hopkins or any Substitute is unable to serve as a director, resigns as
a director or is removed as a director of Wayne or the Bank prior to the expiration of the Standstill Period, then the Board
or the Bank Board, as applicable, shall appoint a substitute director, recommended by the Ancora Parties and subject to the
approval of the applicable Board of Directors, in its discretion, after exercising its fiduciary duties in good faith, which
approval shall not be unreasonably withheld or delayed (any such substitute director, a "Substitute"), to fill the resulting
vacancy in the class of directors with terms expiring at the conclusion of the Wayne 2020 annual meeting of stockholders.
5. Authority Each of the Parties that is a corporation or other legal entity and each individual Party executing this Agreement
on behalf of a corporation or other legal entity, represents and warrants that: (a) such corporation or other legal entity
is duly organized, validly authorized and in good standing, and possesses full power and authority to enter into and perform
the terms of this Agreement; (b) the execution, delivery and performance of the terms of this Agreement have been duly and
validly authorized by all requisite acts and consents of the company or other legal entity and do not contravene the terms
of any other obligation to which the corporation or other legal entity is subject; and (c) this Agreement constitutes a legal,
binding and valid obligation of each such entity, enforceable in accordance with its terms.
6. Expenses
All costs and expenses
incurred in connection with this Agreement shall be paid by the Party incurring such expenses.
7. Amendment in Writing
This
Agreement and each of its terms may only be amended, waived, supplemented or modified in a writing signed by the signatories
hereto or their respective clients.
8. Governing Law/Venue/Jurisdiction
This Agreement, and the rights and liabilities of
the Parties hereto, shall be governed by and construed in accordance with the laws of the State of Ohio without regard to
conflict of law provisions. The venue and jurisdiction for adjudication of any and all disputes between the Parties to this
Agreement shall be in the State of Ohio with a court of competent jurisdiction located in Wayne County, Ohio.
9. Notice of
Breach and Remedies
The Parties expressly agree that an actual or threatened breach of this Agreement by any Party will give
rise to irreparable injury that cannot adequately be compensated by damages. Accordingly, in addition to any other remedy
to which it may be entitled, each Party shall be entitled to seek a temporary restraining order or injunctive relief to prevent
a breach of the provisions of this Agreement or to secure specific enforcement of its terms and provisions. The Ancora Parties
expressly agree that they will not be excused or claim to be excused from performance under this Agreement as a result of
any material breach by Wayne unless and until Wayne is given written notice of such breach and thirty (30) business days either
to cure such breach or for Wayne to seek relief in court. If Wayne seeks relief in court, the Ancora Parties irrevocably stipulate
that any failure to perform by the Ancora Parties shall be deemed to constitute irreparable harm under this Agreement, therefore
Wayne shall not be required to provide further proof of irreparable harm in order to obtain equitable relief and the Ancora
Parties shall not deny or contest that such circumstances would cause Wayne irreparable harm. If, after such thirty (30) business
day period, Wayne has not either reasonably cured such material breach or obtained relief in court, the Ancora Parties may
terminate this Agreement by delivery of written notice to Wayne. Wayne expressly agrees that it will not be excused or claim
to be excused from performance under this Agreement as a result of any material breach by the Ancora Parties or any Member
thereof unless and until the Ancora Parties are given written notice of such breach and thirty (30) business days either to
cure such breach or for the Ancora Parties to seek relief in court. If the Ancora Parties seek relief in court, Wayne irrevocably
stipulates that any failure to perform by Wayne shall be deemed to constitute irreparable harm under this Agreement, therefore
the Ancora Parties shall not be required to provide further proof of irreparable harm in order to obtain equitable relief
and Wayne shall not deny or contest that such circumstances would cause the Ancora Parties irreparable harm. If, after such
thirty (30) business day period, the Ancora Parties have not either reasonably cured such material breach or obtained relief
in court, Wayne may terminate this Agreement by delivery of written notice to the Ancora Parties.
10. Counterparts
This Agreement
may be executed in counterparts, each of which shall be considered to be an original or true copy of this Agreement. Faxed
or emailed signatures shall be presumed valid.
11. Non-Waiver
The failure of any one of the Parties to insist upon strict
adherence to any term of this Agreement on any occasion shall not be considered a waiver thereof or deprive the Parties of
the right thereafter to insist upon strict adherence to that term or any other term of this Agreement.
12. Disclosure of This
Agreement
The parties contemplate that there will be no disclosure regarding this Agreement other than a joint press release
and associated 8-K by Wayne and Ancora disclosing Mr. Hopkins' involvement on the board, which press release shall be subject
to prior approval by the Ancora Parties (such approval not to be unreasonably withheld). No details of this Agreement will
be publicly disclosed except as may be required by law or legal process.
13. Entire Agreement
With the exception of the NDA
(Ex. A), this Agreement constitutes the full, complete and entire understanding, agreement, and arrangement of and between
the Parties with respect to the subject matter hereof and supersedes any and all prior oral and written understandings, agreements
and arrangements between them. There are no other agreements, covenants, promises or arrangements between the Parties other
than those set forth in this Agreement.
14. Notice
All notices and other communications which are required or permitted hereunder
shall be in writing and sufficient if by same-day hand delivery (including delivery by courier) or sent by fax, addressed
as follows:
If to Wayne:
Jay Van Sickle CEO Wayne Savings Bancshares, Inc.
151 North Market Street Wooster, OH 44691
If to the Ancora
Parties:
Brian Hopkins Managing Director Ancora Advisors, LLC
6060 Parkland Boulevard, Suite 200 Cleveland, Ohio 44124
Fax:
(216) 825-4001
15. Termination
This Agreement shall cease, terminate and have no further force and effect upon the expiration of the last
day of the Standstill Period, or the earlier termination of the Agreement pursuant to the terms hereof, or by mutual written
agreement of the Parties; provided, however, that the provisions regarding the non-disclosure of confidential information,
as set forth in Section 1, and the provisions regarding non-disparagement as set forth in Section 3, shall survive the termination
of the Agreement..
16. Further Assurances
The Ancora Parties and Wayne agree to take, or cause to be taken, all such further
or other actions as shall reasonably be necessary to make effective and consummate the transactions contemplated by this Agreement.
17. Successors and Assigns
All covenants and agreements contained herein shall bind and inure to the benefit of the parties
hereto and their respective successors and assigns.
18. No Third Party Beneficiaries
This Agreement is solely for the benefit
of the parties and is not enforceable by any other person.
IN WITNESS WHEREOF, the Parties hereto have each executed this Agreement on the date set forth below. Dated: ________________,
2017
ANCORA ADVISORS, LLC
By: Brian Hopkins
Title: Managing Member
MERLIN PARTNERS
By: Brian Hopkins
Title: Managing Member
AAMAF
LP
By: Brian Hopkins
Title: Managing Member
ANCORA CATALYST FUND LP
By: Brian Hopkins
Title: Managing Member
WAYNE SAVINGS BANCSHARES,
INC.
By: Peggy J. Schmitz
Title: Chair of the Board of Directors
After reasonable inquiry and to the best of my knowledge
and belief, I certify that the information set forth in this statement is true, complete
and correct.