Company: NWFL
Filing Date: 2025-09-19
Form Type: S-4
Source: 0001193125-25-208580
Chunk: 30

Company: NORWOOD FINANCIAL CORP
Filing Date: 2025-09-19
Form: S-4
Chunk 30
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20% of the outstanding shares of PB Bankshares common stock, and the number of shares to be converted into Norwood common stock will equal 80% of the outstanding PB Bankshares
common stock. Pursuant to this limitation, if the aggregate number of shares with respect to which a valid cash consideration election is made is greater than 20% of the outstanding shares of PB Bankshares common stock, a pro rata portion of those
shares will be converted into the right to receive Norwood common stock such that the number of shares of PB Bankshares common stock converted into the cash consideration equals 20% of the total. Conversely, if the number of shares pursuant to which
a valid cash consideration election is made is less than 20% of the outstanding shares of PB Bankshares common stock, first such number of shares for which no election has been made and then, if necessary, such number of shares for which a stock
consideration election has been made will be converted, as necessary, into stock consideration such that the number of shares of PB Bankshares common stock to be converted into cash in the transaction does not exceed 20% of the total number of
shares. In addition, the aggregate cash consideration pool may be decreased, and the aggregate stock consideration pool may be increased, in order for the merger to qualify as a reorganization within the meaning of Section 368(a) of the
Internal Revenue Code.

The allocation of the mix of consideration payable to PB Bankshares shareholders in the merger will not be known
until Norwood tallies the results of the cash/stock elections made by PB Bankshares shareholders. PB Bankshares shareholders may not receive the amounts of cash or stock they elected which could result in, among other things, tax consequences that
differ from those that would have resulted had such shareholders received the form of consideration they elected.

Because the Market Price of Norwood Common Stock May Fluctuate, PB Bankshares Shareholders Cannot be Sure of the Value of the Stock Consideration They May Receive.

PB Bankshares shareholders may elect to receive cash for some shares and Norwood common stock for others in the merger. The exchange ratio of
0.7850 of a share of Norwood common stock per share of PB Bankshares common stock at which Norwood is issuing its shares as part of the merger consideration is fixed (subject to customary anti-dilution adjustments and potential adjustment in certain
circumstances involving a decline in Norwood’s stock price that exceeds a specified index).

16

Consequently,