Company: NWFL
Filing Date: 2025-10-28
Form Type: 424B3
Source: 0001193125-25-252482
Chunk: 160

Company: NORWOOD FINANCIAL CORP
Filing Date: 2025-10-28
Form: 424B3
Chunk 160
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 the effective time of the merger. The persons appointed will be compensated as directors by Norwood in accordance with Norwood’s normal practices. Appointment of PB Bankshares Directors to Regional Advisory Board.All non-employeedirectors serving on the board of directors of PB Bankshares as of the date of the merger agreement who are not be selected to join the boards of Norwood and Wayne, will be invited to join a newly-formed regional advisory board. Continued Director and Officer Indemnification of Liability and Insurance Coverage.For a period of six years following the effective time of the merger, Norwood has agreed to indemnify and hold harmless the directors and officers of PB Bankshares against all liability arising out of actions or omissions occurring at or before the effective time of the merger to the same extent as PB Bankshares currently provides for indemnification of its officers and directors. Additionally, for a period of six years following the effective time of the merger, Norwood has also agreed to maintain in effect PB Bankshares’s directors’ and officers’ liability insurance coverage or provide a policy with comparable coverage; provided, however, that Norwood shall not be obligated to make an aggregate premium payment for such six (6) year tail coverage period in respect of such policy (or coverage replacing such policy) which exceeds 150% of the annual premiums currently paid by PB Bankshares for such insurance. 105

Treatment of Stock Options

Certain directors and executive officers of PB Bankshares hold outstanding stock options to purchase shares of PB Bankshares common stock
granted under the PB Bankshares 2022 Equity Incentive Plan (the “EIP”). The EIP, including the number of shares of PB Bankshares common stock reserved thereunder, has been previously approved by shareholders of PB Bankshares. The merger
agreement provides that, at the effective time of the merger, each outstanding stock option granted under the EIP which is outstanding and unexercised, shall automatically become vested and shall be cancelled and, subject to PB Bankshares’s
receipt of an option surrender agreement shall be converted into the right to receive from Norwood a cash payment in an amount, less required withholding taxes, equal to the product of (i) the number of shares of PB Bankshares Common Stock
subject to the stock option, multiplied by (ii) the amount by which the Cash Consideration (the “Option Payment Amount”) exceeds the exercise price of such stock option. If the exercise price of a stock option is greater than the
Option Payment Amount, then at the