Company: NWFL
Filing Date: 2025-10-28
Form Type: 424B3
Source: 0001193125-25-252482
Chunk: 264

Company: NORWOOD FINANCIAL CORP
Filing Date: 2025-10-28
Form: 424B3
Chunk 264
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 plans approved by Norwood stockholders), then the Stock Consideration will be adjusted proportionately to
account for such change and all references herein to the term Stock Consideration will be deemed to mean the Stock Consideration as adjusted.

Section 2.7 .It is the intent of the parties hereto that Norwood, by reason
of this Agreement, shall not (until consummation of the transactions contemplated hereby) control, directly or indirectly, Bankshares or Presence Bank, or to exercise, directly or indirectly, a controlling influence over the management or policies
of Bankshares or Presence Bank.

A-8

Section 2.8 . At the
Effective Time of the Merger, each option to acquire shares of Bankshares Common Stock that is outstanding and unexercised immediately prior thereto (“Bankshares Stock Option”) pursuant to the PB Bankshares, Inc. 2022 Equity Incentive
Plan (the “Bankshares Equity Plan”) shall automatically become vested and shall be cancelled and, subject to Bankshares’s receipt of an option surrender agreement in the form set forth in the Norwood’s Disclosure Schedule,
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 Bankshares Common Stock subject to the Bankshares Stock Option,
multiplied by (ii) the amount by which the Cash Consideration (the “Option Payment Amount”) exceeds the exercise price of such Bankshares Stock Option. If the exercise price of a Bankshares Stock Option is greater than the Option
Payment Amount, then at the Effective Time of the Merger, such Bankshares Stock Option shall be cancelled without any payment made in exchange therefor. At the election of Norwood, Norwood shall fund the Option Payment Amount and transfer such
Option Payment Amount to Bankshares, which shall serve as paying agent on behalf of Norwood: in which case Bankshares shall make such payments to the former option holder, immediately prior to the Effective Time of the Merger, and shall report such
payments as compensation on IRS Form W-2 or 1099-NEC, as applicable.

Section 2.9 At the Effective Time of the Merger, any vesting restrictions
on each share of restricted stock units or restricted stock outstanding immediately prior thereto (“Bankshares Restricted Stock”) pursuant to the Bankshares Equity Plan shall automatically lapse and the Bankshares Restricted Stock shall
be treated as issued and outstanding shares of Bankshares