Company: NWFL
Filing Date: 2025-07-07
Form Type: 425
Source: 0001193125-25-156258
Chunk: 16

Company: NORWOOD FINANCIAL CORP
Filing Date: 2025-07-07
Form: 425
Chunk 16
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receive the Stock Consideration shall be equal to 80% of the number of shares of Bankshares Common Stock outstanding as of the Effective Time of the Merger (the “Aggregate Stock Limit”), and the right to receive the Cash Consideration
shall be equal to 20% of the number of shares of Bankshares Common Stock outstanding immediately prior to the Effective Time of the Merger (the “Aggregate Cash Limit”).

(e) If the number of Cash Election Shares is less than the Aggregate Cash Limit, then:

(1) all Cash Election Shares shall be converted into the right to receive the Cash Consideration,

(2) Non-Election Shares shall then be deemed to be Cash Election Shares to the extent
necessary to have the total number of Cash Election Shares equal the Aggregate Cash Limit. If less than all of the Non-Election Shares need to be treated as Cash Election Shares, then a sufficient number of Non-Election Shares shall be deemed Cash Election Shares (“Deemed Cash Election Shares”) and Stock Election Shares (“Deemed Share Election Shares”) on a pro rata basis, as described in
Section 2.2(h) below, such that the sum of the number of Cash Election Shares plus the number of Deemed Cash Election Shares equals the Aggregate Cash Limit, and all Deemed Share Election Shares shall be treated as Stock Election Shares,

(3) if all of the Non-Election Shares are treated as Cash Election Shares under the
preceding subsection and the total number of Cash Election Shares is less than the Aggregate Cash Limit, then the Exchange Agent shall convert on a pro rata basis, as described in Section 2.2(h), below, a sufficient number of Stock Election
Shares into Cash Election Shares (“Reallocated Cash Shares”) such that the sum of the number of Cash Election Shares plus the number of Reallocated Cash Shares equals the Aggregate Cash Limit, and all Reallocated Cash Shares will be
converted into the right to receive the Cash Consideration, and

(4) the Stock Election Shares which are not Reallocated
Cash Shares shall be converted into the right to receive the Stock Consideration.

(f) If the number of Cash Election Shares is greater
than the Aggregate Cash Limit, then:

(1) all Stock Election Shares and all
Non-Election Shares shall be converted into the right to receive the Stock Consideration,

(2) the Exchange Agent shall convert on a pro rata basis as described below a sufficient number of Cash Election Shares
(“Reallocated Stock Shares”) such