Company: NWFL
Filing Date: 2025-10-28
Form Type: 424B3
Source: 0001193125-25-252482
Chunk: 161

Company: NORWOOD FINANCIAL CORP
Filing Date: 2025-10-28
Form: 424B3
Chunk 161
---
 Effective Time of the Merger, such stock option shall be cancelled without any payment made in exchange therefor. Such payments to the former option holder shall be reported as compensation on IRS Form W-2 or 1099-NEC, as applicable.

Treatment of Restricted Stock

Certain directors and executive officers of PB Bankshares hold shares of PB Bankshares Penn restricted stock granted under
the EIP. The merger agreement provides that, at the effective time of the merger, any vesting restrictions on each share of restricted stock units or restricted stock outstanding immediately prior thereto shall automatically lapse and the PB
Bankshares restricted stock award shall be treated as issued and outstanding shares of PB Bankshares common stock. PB Bankshares shall withhold a sufficient amount of PB Bankshares common stock necessary to satisfy the tax withholding requirements
associated with such vesting of such restricted stock award and shall provide the required tax reporting associated with the vesting of such restricted stock.

Change in Control Agreements with Executive Officers.

Presence Bank has previously entered into change in control agreements with Douglas Byers, Lindsay Bixler, William Sayre and Larry Witt.
Pursuant to the merger agreement, the Company has agreed to honor these change in control agreements, which provide certain benefits in the event such employee’s employment is involuntarily terminated under specified circumstances, in
connection with or following a change in control, such as the merger. Messrs. Byers and Witt have each entered into new employment agreements and non-competition and
non-solicitation agreements with Norwood which supersede their change in control agreements.

The
remaining change in control agreements provide that, in the event of an involuntary termination of employment following a change in control of Presence Bank by its successor without cause, or if such employee terminates his or her employment for
“good reason”, as defined under such agreements, and such conditions are not remedied within 30 days following such notice of good reason, each employee subject to a change in control agreement is entitled to receive a lump sum payment
equal to two (2.0) times the sum of (i) the employee’s annual base salary at the greater of either the date of the change in control or on the date the employee is terminated, plus (ii) the employee’s highest cash bonus paid
over the prior three-year period. In addition, each employee will be entitled to receive from Norwood a lump sum payment equal to twelve months of reimbursement for the COBRA charge in effect at the time of the employee’s termination to cover