As filed with the Securities and Exchange Commission on August 14,
1998.
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
-------------------------
Norwood Financial Corp.
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Pennsylvania 23-2828306
- ------------------------------- -------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
717 Main Street
Honesdale, Pennsylvania 18431
(717) 253-1455
(Address of principal executive offices)
Norwood Financial Corp.
Stock Option Plan
------------------------
(Full Title of the Plan)
Gregory A. Gehlmann, Esq.
Ruel B. Pile, Esq.
Linda Delivorias, Esq.
Malizia, Spidi, Sloane & Fisch, P.C.
1301 K Street, N.W.
Suite 700 East
Washington, D.C. 20005
(202) 434-4660
(Name, address and telephone number of agent for service)
------------------------------
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
================================================================================================================================
Title of Proposed Proposed Amount of
Securities to Amount to Maximum Offering Maximum Offering Registration
be Registered be Registered Price Per Share Price (2) Fee (2)
- ------------- ------------- --------------- ----------- --------
<S> <C> <C> <C> <C>
Common Stock
$.10 par value 500,000(1) (2) $13,189,979 $3,891.04
================================================================================================================================
</TABLE>
(1) The maximum number of shares of common stock issuable upon exercise of
options granted or to be granted under the Norwood Financial Corp.
Stock Option Plan consists of 500,000 shares which are being registered
under this Registration Statement and for which a registration fee is
being paid. Additionally, an indeterminate amount of additional shares
which may be offered and issued to prevent dilution resulting from
stock splits, stock dividends or similar transactions are being
registered hereunder for which no additional fee is required.
(2) Under Rule 457(h) of the 1933 Act, the registration fee may be
calculated, inter alia, based upon the price at which the stock options
may be exercised. 500,000 shares are being registered hereby, of which
51,950 shares are under an option at an exercise price of $16.72 per
share ($868,604 in the aggregate). The remainder of such shares, which
are not presently subject to options (448,050 shares), are being
registered based upon the closing price of the common stock of Norwood
Financial Corp. as reported on the "Nasdaq National Market" on August
5, 1998, of $27.5 per share ($12,321,375 in the aggregate) for a total
offering of $13,189,979.
<PAGE>
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
The document(s) containing the information specified in Part I of Form
S-8 will be sent or given to participants in the Norwood Financial Corp. Stock
Option Plan (the "Plan") as specified by Rule 428(b)(1) promulgated by the
Securities and Exchange Commission (the "Commission") under the Securities Act
of 1933, as amended ("Securities Act").
Such document(s) are not being filed with the Securities and Exchange
Commission, but constitute (along with the documents incorporated by reference
into the Registration Statement pursuant to Item 3 of Part II hereof) a
prospectus that meets the requirements of Section 10(a) of the Securities Act.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Certain Documents by Reference
- --------------------------------------------------------
The following documents filed by Norwood Financial Corp. (the "Company"
or "Registrant") with the Securities and Exchange Commission are hereby
incorporated by reference in this Registration Statement:
(a) The Company's Registration Statement on Form 10 filed with the
Securities and Exchange Commission on April 29, 1996 and amendments thereto;
(b) The Company's Annual Report on Form 10K filed with the Securities
and Exchange Commission for the fiscal year ended December 31, 1997;
(c) The Company's Quarterly Report on Form 10-Q for the quarters ended
June 30, 1998 and March 31, 1998, as filed with the Securities and Exchange
Commission; and
(d) The Company's Definitive Proxy Statement related to the 1998 Annual
Meeting of Stockholders as filed with the Commission.
All documents filed by the Company pursuant to Sections 13, 14, or
15(d) of the Securities and Exchange Act of 1934, as amended (the "Exchange
Act") after the date hereof and prior to the termination of the offering of the
shares of Common Stock shall be deemed to be incorporated by reference into this
Registration Statement and to be a part hereof from the date of filing of such
documents. Any statement contained in the documents incorporated, or deemed to
be incorporated, by reference herein or therein shall be deemed to be modified
or superseded for purposes of this Registration Statement and the Prospectus to
the extent that a statement contained herein or therein or in any other
subsequently filed document which also is, or is deemed to be, incorporated by
reference herein or therein modifies or supersedes such statement. Any such
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this Registration Statement and the
Prospectus.
The Company shall furnish without charge to each person to whom the
Prospectus is delivered, on the written or oral request of such person, a copy
of any or all of the documents incorporated by reference, other than exhibits to
such documents (unless such exhibits are specifically incorporated by
II-1
<PAGE>
reference to the information that is incorporated). Requests should be directed
to Norwood Financial Corp., 717 Main Street, Honesdale, Pennsylvania 18431,
telephone number (717) 253-1455.
All information appearing in this Registration Statement and the
Prospectus is qualified in its entirety by the detailed information, including
financial statements, appearing in the documents incorporated herein or therein
by reference.
Item 4. Description of Securities.
- -----------------------------------
Not applicable.
Item 5. Interests of Named Experts and Counsel.
- ------------------------------------------------
Not applicable.
Item 6. Indemnification of Directors and Officers.
- ---------------------------------------------------
The officers, directors, agents, and employees of the Company are
indemnified with respect to certain actions pursuant to the Articles of
Incorporation. In addition, directors may not be held liable with respect to
certain breaches of their fiduciary duties. In general, the fiduciary duty of a
director provides that a director of the Company will discharge his or her
duties to the Company in good faith and with that degree of diligence, care, and
skill which ordinary prudent persons would exercise under similar circumstances
and in a like position. In general, the duty of loyalty provides that a director
of the Company will not place himself or herself in a position where a personal
interests would prevent such person from acting for the best interests of the
Company.
Pennsylvania corporate law provides broad statutory indemnification for
directors, officers, employees, and agents including the right to maintain
insurance. Pennsylvania law requires mandatory indemnification for expenses if a
representative of a company is successful on the merits or otherwise, in either
a third party or derivative action.
Under Pennsylvania law, a corporation may, but is not required to,
indemnify its directors, officers, employees, and agents against expenses
(including attorneys' fees), judgements, fines, and amounts paid in settlement
actually and reasonably incurred in connection with an action or proceeding
(other than an action by or in the right of the corporation) if the person to be
indemnified acted in good faith and in a manner he or she reasonably believed to
be in, or not opposed to, the best interests of the corporation, and with
respect to any criminal action or proceeding, that such person did not have
reasonable cause to believe that his or her conduct was unlawful.
Pennsylvania law also allows for indemnification in actions or
proceedings by or in the right of the corporation if the person to be
indemnified was not adjudged to be liable, or despite an adjudication of
liability, such person is fairly and reasonably entitled to indemnity of certain
expenses, as determined by the same court that adjudged such person liable.
Pennsylvania requires that indemnification payments (other than
mandatory payments) may be made only on a case-by-case basis. In addition,
payments may be advanced by a company to cover expenses upon the receipt by the
company of an undertaking by the individual to be indemnified to repay such
payments if indemnification is later determined to not be available to that
individual.
II-2
<PAGE>
The aforementioned indemnification provisions under Pennsylvania law
are non-exclusive. A Pennsylvania corporation may grant additional
indemnification rights through its bylaws or through an agreement, a vote of
stockholders, or a vote of disinterested directors and may create a fund of any
nature to secure its indemnification obligations.
Pennsylvania law also allows for the limitation of liability of
directors. A provision in the article of incorporation or bylaws may provide
that a director will not be personally liable for monetary damages for any
actions taken unless the director has breached or failed to perform such
director's fiduciary duty, and the breach or failure consists of self-dealing,
willful misconduct, or recklessness. With respect to the performance of a
director's duty, Pennsylvania allows a director to rely in good faith on
opinions, information, reports, and financial data presented to such person by
officers or employees of the company, counsel, and accountants as to matters
which the director reasonably believes to be in the expert competence of such
person, and committees of the board on which the director does not serve. With
respect to the declaration of dividends or other distribution of assets,
directors of a Pennsylvania corporation are not liable to the corporation if
they rely and act on good faith on the information described in the statute.
However, if they fail to so act, and the failure is willful and reckless,
Pennsylvania law places express statutory liability on directors in these areas.
Pennsylvania law also assumes that directors assent to all actions taken at
board meetings unless they take specific steps to establish that they have not
so assented.
The Articles of Incorporation provides for indemnification in
derivative suits only if the director, officer, employee, or agent is successful
on the merits or otherwise, or such director acted in good faith in the
transaction which is the subject of the action in a manner such director
reasonably believed to be in, or not opposed to, the best interests of the
Company. Such a person shall not be indemnified in respect of any claim, issue,
or matter as to which such director has been adjudged liable to the Company
unless the court in which the suit was brought determines, that despite the
adjudication, but in view of the circumstances, such person is fairly and
reasonably entitled to indemnity for such expenses as the court deems proper.
The Articles of Incorporation provide further for the proration of
amounts to be indemnified where necessary, for the advance payment by the
Company of expenses (including attorneys' fees), if the person receiving the
payment undertakes in writing to repay such amounts if it is determined that
such person is not entitled to such indemnification, and permits the Company to
purchase insurance on the aforementioned persons regardless of the
indemnification provisions against liability.
In the event any portion of the Articles of Incorporation with respect
to indemnification is invalidated by a court, the Company may nevertheless
indemnify each director, officer, employee, and agent as to any costs, charges,
expenses (including attorneys' fees), judgment, fines, and amounts paid in
settlement with respect to any action, suit, or proceeding, to the full extent
permitted by any applicable part of the Articles of Incorporation which has not
been invalidated and to the full extent permitted by applicable law.
Item 7. Exemption from Registration Claimed.
- ---------------------------------------------
Not applicable.
II-3
<PAGE>
Item 8. Exhibits
- -----------------
For a list of all exhibits filed or included as part of this
Registration Statement, see "Index to Exhibits" at the end of this Registration
Statement.
Item 9. Undertakings
- ---------------------
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration
statement;
(i) To include any prospectus required by Section 10(a)(3) of
the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the
most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental
change in the information set forth in the registration
statement;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the
registration statement or any material change to such
information in the registration statement;
provided however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
registration statement is on Form S-3, Form S-8 or F-3, and the information
required to be included in a post-effective amendment by those paragraphs is
contained in periodic reports filed by the registrant pursuant to Section 13 or
15(d) of the Securities Exchange Act of 1934 that are incorporated by reference
in the registration statement.
(2) That, for the purpose of determining any liability under
the Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) The undersigned registrant hereby undertakes to deliver or cause to
be delivered with the prospectus, to each person to whom the prospectus is sent
or given, the latest annual report, to security holders that is incorporated by
reference in the prospectus and furnished pursuant to and meeting the
II-4
<PAGE>
requirements of Rule 14a-3 or Rule 14c-3 under the Securities Exchange Act of
1934; and, where interim financial information required to be presented by
Article 3 of Regulation S-X is not set forth in the prospectus, to deliver, or
cause to be delivered to each person to whom the prospectus is sent or given,
the latest quarterly report that is specifically incorporated by reference in
the prospectus to provide such interim financial information.
(d) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers, and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Securities Act of 1933 and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the registrant of expenses incurred or paid by a director, officer,
or controlling person of the registrant in the successful defense of any action,
suit, or proceeding) is asserted by such director, officer, or controlling
person in connection with the securities being registered, the registrant will,
unless in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy expressed in the Securities
Act of 1933 Act and will be governed by the final adjudication of such issue.
II-5
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
Norwood Financial Corp. certifies that it has reasonable grounds to believe that
it meets all of the requirements for filing a Registration Statement on Form S-8
and has duly caused this Registration Statement to be signed on its behalf by
the undersigned thereunto duly authorized, in the City of Honesdale in the
Commonwealth of Pennsylvania, on the 11th day of August 1998.
Wayne Bank
By: /s/ Lewis J. Critelli
--------------------------------------------------
Lewis J. Critelli
Senior Vice President and Chief Financial Officer
(Duly Authorized Representative)
POWER OF ATTORNEY
We, the undersigned directors and officers of Norwood Financial Corp.,
do hereby severally constitute and appoint Lewis J. Critelli, our true and
lawful attorney and agent, to do any and all things and acts in our names in the
capacities indicated below and to execute any and all instruments for us and in
our names in the capacities indicated below which said Lewis J. Critelli may
deem necessary or advisable to enable Norwood Financial Corp. to comply with the
Securities Act of 1933, as amended, and any rules, regulations and requirements
of the Securities and Exchange Commission, in connection with the Registration
Statement on Form S-8 relating to the offering of the Company's Common Stock,
including specifically, but not limited to, power and authority to sign, for any
of us in our names in the capacities indicated below, the Registration Statement
and any and all amendments (including post-effective amendments) thereto; and we
hereby ratify and confirm all that said Lewis J. Critelli shall do or cause to
be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this registration statement has been signed below by the following persons in
the capacities and on the date indicated.
By: /s/ William W. Davis, Jr. By: /s/ Russell L. Ridd
--------------------------------------- -------------------------
William W. Davis, Jr. Russell L. Ridd
President and Chief Executive Officer Chairman of the Board
Date: August 11, 1998 Date: August 11, 1998
By: /s/ Edward C. Kasper By: /s/ Lewis J. Critelli
--------------------------------------- ------------------------
Edward C. Kasper Lewis J. Critelli
Senior Vice President Senior Vice President and
Chief Financial Officer
Date: August 11, 1998 Date: August 11, 1998
<PAGE>
By: /s/ John H. Sanders By: /s/ Joseph A. Kneller
--------------------------------------- --------------------------
John H. Sanders Joseph A. Kneller
Senior Vice President Vice President
Date: August 11, 1998 Date: August 11, 1998
By: /s/ Harold A. Shook By: /s/ Charles E. Case
-------------------------------------- --------------------------
Harold A. Shook Charles E. Case
Director Director
Date: August 11, 1998 Date: August 11, 1998
By: /s/ John E. Marshall By: /s/ Daniel J. O'Neill
--------------------------------------- -------------------------
John E. Marshall Daniel J. O'Neill
Director and Secretary Director
Date: August 11, 1998 Date: August 11, 1998
By: /s/ Dr. Kenneth A. Phillips By: /s/ Gary P. Rickard
--------------------------------------- -------------------------
Dr. Kenneth A. Phillips Gary P. Rickard
Director Director
Date: August 11, 1998 Date: August 11, 1998
By: /s/ John J. Weidner
---------------------------------------
John J. Weidner
Director
Date: August 11, 1998
<PAGE>
INDEX TO EXHIBITS
Exhibit Description Page
- ------- ----------- ----
4.1 Norwood Financial Corp. Stock Option Plan 10
4.2 Form of Stock Option Agreement to be entered into 24
with respect to Incentive Stock Options
5.1 Opinion of Malizia, Spidi, Sloane & Fisch, P.C. as to the 29
validity of the Common Stock being registered
23.1 Consent of Malizia, Spidi, Sloane & Fisch, P.C. (appears --
in their opinion filed as Exhibit 5.1)
23.2 Consent of Independent Auditors 32
24 Reference is made to the Signatures section of this --
Registration Statement for the Power of Attorney
contained therein
EXHIBIT 4.1
Norwood Financial Corp. Stock Option Plan
<PAGE>
NORWOOD FINANCIAL CORP.
STOCK OPTION PLAN
Approved by Board of Directors
Ratified by Board of Directors
Shareholders' Approval
<PAGE>
NORWOOD FINANCIAL CORP.
1. Purpose of the Plan
-------------------
The Plan shall be known as the Norwood Financial Corp. Stock Option
Plan (the "Plan"). The purpose of the Plan is to attract and retain the
best available personnel for positions of substantial responsibility
and to provide additional incentive to officers of the Corporation (the
"Corporation"), or any present or future parent or subsidiary of the
Bank to promote the success of its business. The Plan is intended to
provide for the grant of "Incentive Stock Options" within the meaning
of Section 422 of the Internal Revenue Code of 1986, as amended (the
"Code") . Each and every one of the provisions of the Plan relating to
Incentive Stock Options shall be interpreted to conform to the
requirements of Section 422 of the Code.
2. Definitions
-----------
As used herein, the following definitions shall apply:
(a) "Award" means the grant by the Committee of an Incentive Stock
Option as provided in the Plan.
(b) "Board" means the Board of Directors of the Corporation, or
any successor or parent corporation thereto.
(c) "Code" means the Internal Revenue Code of 1986, as amended, or
any succeeding statute.
(d) "Committee" means the Compensation Committee appointed by the
Board in accordance with paragraph 4(a) of the Plan.
(e) "Common Stock" means Common Stock, par value One Dollar
($0.10) per share, of the Corporation, or any successor or
parent corporation hereto.
(f) "Continuous Employment" or "Continuous Status as an Employee"
means the absence of any interruption or termination of
employment with the Corporation or any present or future
Parent or Subsidiary of the Corporation. Employment shall not
be considered interrupted in the case of sick leave, military
leave or any other leave of absence approved by the
Corporation or in the case of transfers between payroll
locations, of the Corporation or between the Corporation, any
Parent, Subsidiaries or successor.
(g) "Bank" means Wayne Bank, or any successor corporation thereto.
(h) "Effective Date" means the date specified in Section 12 hereof.
(i) "Employee" means any person employed by the Corporation or any
present or future Parent or Subsidiary of the Corporation.
<PAGE>
(j) "Incentive Stock Option" or "ISO" means an Option to purchase
Shares granted, by the Committee pursuant to Section 7 hereof
which is subject to the limitations and restrictions of
Section 7 hereof and is intended to qualify under Section 422
of the Code.
(k) "Option" means an Option granted pursuant to this Plan
providing the holder of such Option with the right to purchase
Common Stock.
(1) "Optioned Stock" means stock subject to an Option granted
pursuant to the Plan.
(m) "Optionee" means any person who receives an Option or Award
pursuant to the Plan.
(n) "Parent" shall mean any present or future corporation which
would be a "parent corporation" as defined in Subsections
424(e) and (g) of the Code.
(o) "Participant" means any Officer of the Corporation or any
Parent or Subsidiary of the Corporation.
(p) "Plan" shall mean the Norwood Financial Corp. Stock Option
Plan.
(q) "Share" shall mean one share of the Common Stock.
(r) "Subsidiary" shall mean any present or future corporation
which would be a "subsidiary corporation" as defined in
Subsections 424(f) and (g) of the Code.
3. Shares Subject to the Plan
--------------------------
Except as otherwise required by the provisions of Section 14 hereof,
the aggregate number of Shares with respect to which Awards may be made
pursuant to the Plan shall not exceed Five Hundred Thousand (500,000)
Shares. Such Shares may either be authorized but unissued shares or
treasury shares.
An Award shall not be considered to be made under the Plan with respect
to any Option which terminates prior to its exercise. New Awards may be
granted under the Plan with respect to the number of Shares as to which
termination has occurred.
4. Administration of the Plan
--------------------------
(a) Composition of the Committee. The Plan shall be administered
by the Committee consisting of at least three (3) nonemployee
Directors of the Corporation appointed by the Board and
serving at the pleasure of the Board. All persons designated
as members of the Committee shall be "disinterested persons"
within the meaning of Rule 16b-3 under the Securities Exchange
Act Of 1934.
- 2 -
<PAGE>
(b) Powers of the Committee. The Committee is authorized (but only to
the extent not contrary to the express provisions of the Plan or
to resolutions adopted by the Board) to interpret the Plan, to
prescribe, amend and rescind rules and regulations relating to
the Plan, to determine the form and content of Awards to be
issued under the Plan and to make other determinations necessary
or advisable for the administration of the Plan, and shall have
and may exercise such other power and authority as may be
delegated to it by the Board from time to time. A majority of the
entire Committee shall constitute a quorum and the action of a
majority of the members present at any meeting at which a quorum
is present shall be deemed the action of the Committee. In no
event may the Committee revoke outstanding Awards without the
consent of the Participant.
The President and Chief Executive Officer of the Corporation and
such other officers as shall be designated by the Committee are
hereby authorized to execute instruments evidencing Awards on
behalf of the Corporation and to cause them to be delivered to
the Participants.
(c) Effect of Committee's Decision. All decisions, determinations and
interpretations of the Committee shall be final and conclusive on
all persons affected thereby.
5. Eligibility
-----------
(a) Awards may be granted to Employees. The Committee shall from time
to time determine the Employees who shall be granted Awards under
the Plan and the number to be granted to each such officer and
other persons under the Plan. In selecting Participants and in
determining the number of Shares of Common Stock to be granted to
each such Participant pursuant to each Award granted under the
Plan, the Committee may consider the nature of the services
rendered by each such Participant, each such Participant's
current and Potential contribution to the Corporation and such
other factors as the Committee may, in its sole discretion deem
relevant. The Committee shall also consider those Options to be
awarded under any employment contract with any officer or
Employee in effect now or in the future to be granted hereunder.
Officers or other persons who have been granted an Award may, if
otherwise eligible, be granted additional Awards.
(b) The aggregate fair market value (determined as of the date the
Option is granted) of the Shares with respect to which Incentive
Stock Options are exercisable for the first time by each Employee
during any calendar year (under all Incentive Stock Option plans,
as defined in Section 422 of the Code, of the Corporation or any
present or future Parent or Subsidiary of the Corporation) shall
not exceed $100,000. Notwithstanding the prior provisions of this
Section 5, the Committee may grant Options in excess of the
foregoing limitations, provided said Options shall be clearly and
specifically designated as not being Incentive Stock Options, as
defined in Section 422 of the Code.
- 3 -
<PAGE>
6. Term of the Plan
----------------
The Plan shall continue in effect for a term of ten (10) years from the
Effective Date, unless sooner terminated pursuant to Section 15 hereof. No
Option shall be granted under the Plan after ten (10) years from the
Effective Date.
7. Terms and Conditions of Incentive Stock Options
-----------------------------------------------
Incentive Stock Options may be granted only to Participants who are
Employees. Each Incentive Stock Option granted pursuant to the Plan shall
be evidenced by an instrument in such form as the Committee shall from time
to time approve. Each and every Incentive Stock Option granted pursuant to
the Plan shall comply with, and be subject to, the following terms and
conditions:
(a) Option Price
(i) The price per Share at which each Incentive Stock Option
granted under the Plan may be exercised shall not, as to any
particular Incentive Stock Option, be less than the fair market
value of the Common Stock at the time such Incentive Stock Option
is granted. For such purposes, if the Common Stock is traded
otherwise than on a national securities exchange at the time of
the granting of an Option, then the price per Share of the
Optioned Stock shall be not less than the mean between the bid
and asked price on the date the Incentive Stock Option is granted
or, if there is no bid and asked price on said date, then on the
next prior business day on which there was a bid and asked price.
If no such bid and asked price is available, then the price per
Share shall be determined by the Committee. If the Common Stock
is listed on a national securities exchange at the time of the
granting of an Incentive Stock Option, then the price per Share
shall be not less than the average of the highest and lowest
selling price on such exchange on the date such Incentive Stock
Option is granted or, if there were no sales on said date, then
the price shall be not less than the mean between the bid and
asked price on such date.
(ii) In the case of an Employee who owns Common Stock
representing more than ten percent (10%) of the outstanding
Common Stock at the time the Incentive Stock Option is granted,
the Incentive Stock Option price shall not be less than one
hundred and ten percent (110%) of the fair market value of the
Common Stock at the time the Incentive Stock Option is granted.
(b) Payment. Full payment for each Share of Common Stock purchased upon
the exercise of any Incentive Stock Option granted under the Plan
shall be made at the time of exercise of each such Incentive Stock
Option and shall be paid in cash (in United States Dollars), Common
Stock or a combination of cash and Common Stock. Common Stock utilized
in full or partial payment of the exercise price shall be valued at
its fair market value at the date of exercise. The Corporation shall
accept full or partial payment in Common Stock only to the extent
permitted by applicable law. No Shares of Common Stock shall be issued
until full payment therefor has been received by the Bank, and no
- 4 -
<PAGE>
Optionee shall have any of the rights of a stockholder of the
Bank until Shares of Common Stock are issued to an Employee.
(c) Term of Incentive Stock Option. The term of each Incentive Stock
Option granted pursuant to the Plan shall be not more than ten
(10) years from the date each such Incentive Stock Option is
granted, provided that in the case of an Employee who owns stock
representing more than ten percent (10%) of the Common Stock
outstanding at the time the Incentive Stock Option is granted,
the term of the Incentive Stock Option shall not exceed five (5)
years.
(d) Exercise Generally. Except as otherwise provided in Section 8
hereof, no Incentive Stock Option may be exercised unless the
Optionee shall have been in the employ of the Corporation at all
times during the period beginning with the date of grant of any
such Incentive Stock Option and ending on the date of exercise of
any such Incentive Stock Option. The Committee may impose
additional conditions upon the right of an Optionee to exercise
any Incentive Stock Option granted hereunder which are not
inconsistent with the terms of the Plan or the requirements for
qualification as an Incentive Stock Option under Section 422 of
the Code.
(e) Transferability. Any Incentive Stock Option granted pursuant to
the Plan shall be exercised during an Optionee's lifetime only by
the Optionee to whom it was granted and shall not be assignable
or transferable otherwise than by will or by the laws of descent
and distribution.
8. Effect of Termination of Employment, Disability or Death on Incentive Stock
Options
---------------------------------------------------------------------------
(a) Termination of Employment. In the event that any Optionee's
employment or other service provided to the Corporation shall
terminate for any reason, other than Permanent and Total
Disability (as such term is defined in Section 22(e)(3) of the
Code) or death, all of any such Optionee's Options, and all of
any such Optionee's rights to purchase or receive Shares of
Common Stock pursuant thereto, shall automatically terminate on
the earlier of (i) the respective expiration dates of any such
Option or (ii) the expiration of not more than three (3) months
after the date of such termination of employment or such service,
but only if, and to the extent that, the Optionee was entitled to
exercise any such option at the date of such termination. In the
event of a termination for due cause, as hereinafter defined, the
Option shall automatically terminate on the date of such
termination. For the purpose of this Paragraph, "due cause" shall
mean:
(i) the willful failure by the Employee to substantially perform
the Employee's material duties other than any such failure
resulting from the Employee's incapacity due to physical or
mental illness;
(ii) conviction of a felony;
- 5 -
<PAGE>
(iii) the willful violation by the Employee of any of the
provisions of any agreement or terms of employment;
(iv) the willful violation by the Employee of material
Corporation policy as formally expressed by the Board of
Directors; or
(v) the violation of state or federal banking, tax or financial
laws, regulations or rules in the Employee's own conduct or in
the operation of the Corporation, the result of which is
materially adverse to the Corporation.
In the event that a subsidiary ceases to be a subsidiary of the
Corporation, the employment of all of its employees who are not
immediately thereafter employees of the Corporation shall be
deemed to terminate upon the date such subsidiary so ceases to be
a Subsidiary of the Corporation.
(b) Disability. In the event that any Optionee's employment or other
service with the Corporation shall terminate as the result of the
Permanent and Total Disability of such Optionee, such Optionee
may exercise any options granted to him pursuant to the Plan at
any time prior to the earlier of (i) the respective expiration
dates of any such Options or (ii) the date which is six (6)
months after the date of such termination of employment, but only
if, and to the extent that, the Optionee was entitled to exercise
any such Options at the date of such termination.
(c) Death. In the event of the death of an Optionee, any Options
granted to such Optionee may be exercised by the person or
persons to whom the Optionee's rights under any such Options pass
by will or by the laws of descent and distribution (including the
Optionee's estate during the period of administration) at any
time prior to the earlier of (i) the respective expiration dates
of any such Options or (ii) the date which is six (6) months
after the date of death of such Optionee but only if, and to the
extent that, the Optionee was entitled to exercise any such
Options at the date of death. For purposes of this Section 9(c),
any Option held by an Optionee shall be considered exercisable at
the date of his death if the only unsatisfied condition precedent
to the exercisability of such Option at the date of death is the
passage of a specified period of time. At the discretion of the
Committee, upon exercise of such Options in the event of death,
such persons may receive Shares or cash or combination thereof.
If cash shall be paid in lieu of Shares, such cash shall be equal
to the difference between the fair market value of such Shares
and the exercise price of such Options on the exercise date.
(d) Incentive Stock Options Deemed Exercisable. For purposes of
Sections 8(a), 8(b), and 8(c) above, any Incentive Stock Option
held by any Optionee shall be considered exercisable at the date
of termination of his employment if any such Incentive Stock
Option would have been exercisable at such date of termination of
employment.
- 6 -
<PAGE>
(e) Termination of Incentive Stock Options. To the extent that any
Incentive Stock Option granted under the Plan to any Optionee
whose employment with the Corporation terminates shall not
have been exercised within the applicable period set forth in
this Section 8, any such Incentive Stock Option, and all
rights to purchase or receive Shares of Common Stock pursuant
thereto, as the case may be, shall terminate on the last day
of the applicable period.
9. Right of Repurchase, First Refusal and Restrictions and Disposition
-------------------------------------------------------------------
The Committee, in its sole discretion, may include, as a term of any
Incentive Stock Option, the right of the Corporation, but not the
obligation, to repurchase all or any amount of the Shares acquired by
an Optionee pursuant to the exercise of any such Options (the
"Repurchase Right") or the right of first refusal to acquire Shares
which an Optionee shall desire to sell (the "Right of First Refusal").
The intent of the Repurchase Right is to encourage the continued
employment of the Optionee. The Repurchase Right may provide for, among
other things, a specified duration of the Repurchase Right, a specified
price per Share to be paid upon the exercise of the Repurchase Right
and a restriction on the disposition of the Shares by the Optionee
during the period of the Repurchase Right. The Right of First Refusal
may provide for, among other things, the right under certain
circumstances or during certain periods to acquire Shares which the
Optionee desires to sell at the price offered by a bona fide purchaser
of such shares. The Repurchase Right or the Right of First Refusal may
permit the Bank to transfer or assign such right to another party. The
Bank may exercise the Repurchase Right or the Right of First Refusal
only to the extent permitted by applicable law.
10. Recapitalization, Merger, Consolidation, Change in Control and Similar
Transactions
---------------------------------------------------------------------------
(a) Adjustment. Subject to any required action by the stockholders of the
Corporation, within the sole discretion of the Committee, the
aggregate number of Shares of Common Stock for which Options may be
granted hereunder, the number of Shares of Common Stock covered by
each outstanding Option, and the exercise price per Share of Common
Stock of each such Option, shall all be proportionately adjusted for
any increase or decrease in the number of issued and outstanding
Shares of Common Stock resulting from a subdivision or consolidation
of Shares (whether by reason of merger, consolidation,
recapitalization, reclassification, split up, combination of shares,
or otherwise) or the payment of a stock dividend (but only on the
Common Stock) or any other increase or decrease in the number of such
Shares of Common Stock effected without the receipt of consideration
by the Corporation (other than Shares held by dissenting
stockholders).
(b) Change in Control. All outstanding Awards shall become immediately
exercisable in the event of a change in control or imminent change in
control of the Bank or Corporation, as determined by the Committee. In
the event of such change in control or imminent change in control, the
Optionee shall, at the discretion of the Committee, be entitled to
- 7 -
<PAGE>
receive cash in an amount equal to the fair market value of
the Common Stock subject to the Incentive Stock Option over
the Option Price of such Shares, in exchange for the surrender
of such Options by the Optionee on that date. For purposes of
this Section 10, "change in control" shall be deemed to have
taken place if, as the result of a tender offer, exchange
offer, merger, consolidation, transfer of stock, sale of
assets, contested election or any combination of the forgoing
transactions (a "Transaction"), either (a) more than 15% of
the outstanding stock of the Corporation changes direct or
indirect beneficial ownership, (b) an event occurs that would
require a Securities and Exchange Commission registered
Corporation to file a Form 8-K pursuant to Section 13 or 15(d)
of the Securities and Exchange Act of 1934 (even though the
Corporation may or may not be required to file the form 8-K
with the Securities Exchange Commission or the appropriate
Banking Regulators); (c) substantially all of the
Corporation's assets and/or operations are sold or otherwise
disposed of; (d) any person becomes beneficial owner directly
or indirectly of securities of the Corporation with combined
voting power in sufficient amount to gain majority control of
the Board of Directors; or (e) at any times during any
twenty-four (24) consecutive months, when a majority of the
members of the Corporation's Board of Directors are
individuals who were not members of the Board of Directors at
the beginning of such period, unless such change results from
death or retirement. For purposes of this paragraph, "person"
and "beneficial owner" shall have the meaning ascribed to them
pursuant to the Securities Exchange Act of 1934, as amended,
and the regulations promulgated pursuant thereto. The decision
of the Committee as to whether a change in control or imminent
change in control has occurred shall be conclusive and
binding.
(c) Extraordinary Corporate Actions. Subject to any required
action by the stockholders of the Corporation, in the event of
any change in control, recapitalization, merger,
consolidation, exchange of Shares, spin-off, reorganization,
tender offer, liquidation or other extraordinary corporate
action or event, the Committee, in its sole discretion, shall
have the power, prior or subsequent to such action or event
to:
(i) appropriately adjust the number of Shares of Common Stock
subject to each Option, the exercise price per Share of Common
Stock, and the consideration to be given or received by the
Corporation upon the exercise of any outstanding Option;
(ii) cancel any or all previously granted Options, provided
that appropriate consideration is paid to the Optionee in
Connection therewith; and/or
(iii) make such other adjustments in connection with the Plan
as the committee, in its sole discretion, deems necessary,
desirable, appropriate or advisable, provided, however, that
no action shall be taken by the Committee which would cause
Incentive Stock Options granted pursuant to the Plan to fail
to meet the requirements of Section 422 of the Code. Except as
expressly provided in Section 10(a) and 10(b) hereof, no
Optionee shall have any rights by reason of the occurrence of
any of the events described in this Section 10.
- 8 -
<PAGE>
(d) Acceleration. The Committee shall at all times have the power
to accelerate the exercise date of Options previously granted
under the Plan.
11. Time of Granting Options
------------------------
The date of grant of an Option under the Plan shall, for all purposes,
be the date on which the Committee makes the determination of granting
such Option. Except, however, for purposes of compliance with Section
16 of the Securities Exchange Act of 1934, the date of grant of an
Option shall be deemed the later of the date of grant or the date of
stockholder approval of the Plan. Notice of the determination of the
grant of an Option shall be given to each individual to whom an Option
is so granted within a reasonable time after the date of such grant in
a form determined by the Committee.
12. Effective Date
--------------
The Plan shall become effective as of December 27, 1994, subject to the
approval by the holders of the majority of the Common Stock present and
represented at the annual meeting of the stockholders held on or before
December 26, 1995. Options may be granted prior to ratification of the
Plan by the stockholders if the exercise of such Options is subject to
such stockholder ratification.
13. Approval by Stockholders
------------------------
The Plan shall be approved by stockholders of the Corporation within
twelve (12) months before or after the date the Plan becomes effective.
14. Modification of Options
-----------------------
At any time and from time to time, the Board may authorize the
Committee to direct the execution of an instrument providing for the
modification of any outstanding Option, provided no such modification,
extension or renewal shall confer on the holder of said Option any
right or benefit which could not be conferred on him by the grant of a
new Option at such time, or shall not materially decrease the
Optionee's benefits under the Option without the consent of the holder
of the Option, except as otherwise permitted under Section 15 hereof.
Notwithstanding anything herein to the contrary, the Committee shall
have the authority to cancel outstanding Options with the consent of
the Optionee and to reissue new Options at a lower exercise price, but
in no event less than the then fair market value per share of Common
Stock, in the event that the fair market value per share of Common
Stock at any time prior to the date of exercise of outstanding Options
falls below the exercise price of such Options.
15. Amendment and Termination of the Plan
-------------------------------------
(a) Action by the Board. The Board may alter, suspend or
discontinue the Plan, except that no action of the Board may
increase (other than as provided in Section 10 hereof) the
- 9 -
<PAGE>
maximum number of Shares permitted to be optioned under the
Plan, materially increase the benefits accruing to
participants under the Plan or materially modify the
requirements for eligibility for participation in the Plan
unless such action of the Board shall be subject to approval
or ratification by the stockholders of the Corporation.
(b) Change in Applicable Law. Notwithstanding any other provision
contained in the Plan, in the event of a change in any federal
or state law, rule or regulation which would make the exercise
of all or part of any previously granted Incentive Stock
Option unlawful or subject the Corporation to any penalty, the
Committee may restrict any such exercise without the consent
of the Optionee or other holder thereof in order to comply
with any such law, rule or regulation or to avoid any such
penalty.
16. Conditions Upon Issuance of Shares
----------------------------------
Shares shall not be issued with respect to any Option granted under the
Plan unless the issuance and delivery of such Shares shall all comply
with all relevant provisions of law, including, without limitation, the
Securities Act of 1933, as amended, the rules and regulations
promulgated thereunder, any applicable state securities law and the
requirements of any stock exchange upon which the Shares may then be
listed.
The inability of the Corporation to obtain from any regulatory body or
authority deemed by the Corporation's counsel to be necessary to the
lawful issuance and sale of any Shares hereunder shall relieve the
Corporation of any liability in respect of the non-issuance or sale of
such Shares.
As a condition to the exercise of an Option, the Corporation may
require the person exercising the Option to make such representations
and warranties as may be necessary to assure the availability of an
exemption from the registration requirements of federal or state
securities law.
17. Reservations of Shares
----------------------
During the term of the Plan, the Corporation will reserve and keep
available a number of Shares sufficient to satisfy the requirements of
the Plan.
18. Unsecured Obligations
---------------------
No Participant under the Plan shall have any interest in any fund or
special asset of the Corporation by reason of the Plan or the grant of
any Incentive Stock Option under the Plan. No trust fund shall be
created in connection with the Plan or any grant of any Incentive Stock
Option hereunder and there shall be no required funding of amounts
which may become payable to any Participant.
- 10 -
<PAGE>
19. Withholding Tax
---------------
Where a Participant or other person is entitled to receive Shares
pursuant to the exercise of an Option pursuant to the Plan, the
Corporation shall have the right to require the Participant or such
other person to pay the Corporation the amount of any taxes which the
Corporation is required to withhold with respect to such Shares, or, in
lieu thereof, to retain, or sell without notice, a number of such
Shares sufficient to cover the amount required to be withheld.
20. Miscellaneous
-------------
(a) No Right to Employment. Nothing in this Plan or in any
agreement entered into pursuant to it shall confer upon any
Optionee the right to continue in the employ of the
Corporation or affect any right which the Bank may have to
terminate the employment or other relationship of such
Optionee.
(b) No Right as Shareholders. Recipients of Options under the Plan
shall have no rights as shareholders of the Corporation with
respect thereto unless and until certificates for shares of
Common Stock are issued to them.
21. Governing Law
-------------
The Plan shall be governed by and construed in accordance with the laws
of the Commonwealth of Pennsylvania, except to the extent that federal
law shall be deemed to apply.
- 11 -
EXHIBIT 4.2
Form of Stock Option Agreement to be entered into with respect to
Incentive Stock Options
<PAGE>
NORWOOD FINANCIAL CORP. STOCK OPTION PLAN
INCENTIVE STOCK OPTION AGREEMENT
Incentive Stock Option Agreement made this _____ day of _______, 199__
between Norwood Financial Corp. (Norwood) and ________(Employee).
WHEREAS, Wayne desires to afford the Employee an Opportunity to
purchase shares of common stock of Wayne (Common Stock) as hereinafter provided,
in accordance with the provisions of the Norwood Financial Corp. Stock Option
Plan (Plan), a copy of which is attached.
NOW THEREFORE, in consideration of the mutual covenants hereinafter set
forth and for other good and valuable consideration, the parties hereto,
intending to legally bound hereunder, agree as follows:
1. Grant of Option. Wayne hereby grants to the employee the right and
option (Option) to purchase all or any part of an aggregate of shares of ______
Common Stock. The Option is in all respects limited and conditioned, as
hereinafter provided, and is subject in all respects to the Plan's terms and
conditions, which are incorporated herein by reference and are made a part
hereof.
2. Purchase Price. The purchase price of the share of Common Stock
covered by the Option shall be $ . The date of this Option Agreement is the date
of grant of the Option and it is the determination of the Committee that on this
date the fair market value of said Common Stock was not greater than the Option
price above stated.
3. Term. This Option shall expire on _________, which date is not less
than one nor more than (i) ten years from the date of grant if the Employee does
not own more than 1O% of the combined voting power of all the shares of stock of
Wayne or any subsidiary on the date of grant, or (ii) five years from the date
of grant if the Employee owns more than 10% of the combined voting power of all
the shares of stock of Wayne or any subsidiary on the date of grant.
4. Exercise of Option. This Option may not be exercised earlier than
one year from the date of grant. Thereafter this Option may be exercised in
whole or in part, subject to the provisions of Paragraph 3.
5. Methods of Exercising Option. Subject to the terms and conditions of
this Option Agreement, the Option may be exercised by written notice to Wayne,
at its principal office, which is located at 717 Main Street, Honesdale,
Pennsylvania 18431. Such notice shall state the election to exercise the Option
and the number of shares with respect to which it is being exercised; shall be
signed by the person or persons exercising the Option; and shall be accompanied
by the payment of the full purchase price of such shares. The purchase price
shall be paid in cash or its equivalent, or, in whole or in part through the
transfer of shares of
<PAGE>
Common Stock previously acquired by Employee, provided that if such shares of
Common Stock were acquired through the exercise of an incentive stock option,
such shares were held by the Employee for a period not less than the holding
period described in section 422A(a)(1) of the Code and if such shares were
acquired through the exercise of nonqualified stock option, such shares of
Common Stock have been held by Employee for more than one year. Upon receipt of
such notice and payment, Wayne shall deliver a certificate or certificates
representing the shares with respect to which the Option is so exercised. The
certificate or certificates for the shares as to which the Option shall have
been so exercised shall be registered in the name of the person or persons so
exercising the Option (or, if the Option shall be exercised by the Employee and
if the Employee shall so request in the notice exercising the Option, shall be
registered in the name of the Employee and his spouse, jointly, with the right
of survivorship) and shall be delivered as provided above to, or upon the
written order of, the person or persons exercising the Option. In the event the
Option shall be exercised by any person or persons after the death of the
Employee, such notice shall be accompanied by appropriate proof of the right of
such person or persons to exercise the Option. All shares that shall be
purchased upon the exercise of the Option as provided herein shall be fully paid
and non-assessable.
6. Shares to be Purchased for Investment. Unless Wayne has theretofore
notified the Employee that a registration statement covering the shares to be
acquired upon the exercise of the Option has become effective under the
Securities Act of 1933 and Wayne has not thereafter notified the Employee that
such registration statement is no longer effective, it shall be a condition to
any exercise of this Option that the shares acquired upon such exercise be
acquired for investment and not with a view to distribution, and the person
effecting such exercise shall submit to Wayne a certificate of such investment
intent, together with such other evidence supporting the same as Wayne may
request. Wayne shall be entitled to restrict the transferability of the shares
issued upon any such exercise to the extent necessary to avoid a risk of
violation of the Securities Act of 1933 or of any rules or regulations
promulgated thereunder. Such registrations may, at the option of Wayne, be noted
or set forth in full on the share certificates.
7. Non-Transferability of Option. This Option is not transferable by
Employee otherwise than by will or by the laws of descent and distribution, and
during the lifetime of the Employee, the Option shall be exercisable only by
Employee.
8. Termination of Employment. If Employee's employment with Wayne and
all subsidiary corporations is terminated for any reason other than death or
disability, this Option shall be exercisable at any time prior to the earlier of
the expiration date set forth in Paragraph 3 or three months after the date of
termination, but only to the extent of the accrued right to purchase Common
Stock at the date of such termination.
9. Death. If Employee dies during his employment and prior to the
expiration of this Option as set forth in Paragraph 3, this Option may be
exercised, but only to the extent of the accrued right to purchase Common Stock
at the date of death by Employee's estate, personal representative or
beneficiary who acquired the right to exercise the Option by bequest or
- 2 -
<PAGE>
inheritance or by reason of Employee's death, at any time prior the earlier of
two years following the Employee's death or the expiration date set forth in
Paragraph 3.
10. Disability. If Employee becomes disabled, as defined in the Plan,
during his employment and, prior to the expiration date of the Option as set
forth in Paragraph 3, Employee's employment is terminated as a consequence of
such disability, this Option shall be exercisable by Employee at any time prior
to the earlier of one year following the Employee's termination of employment by
reason of disability or the expiration date specified in Paragraph 3, but only
to the extent of the accrued right to purchase Common Stock at the date of such
termination.
11. Miscellaneous.
(a) The invalidity or unenforceability of any particular provision of
this Agreement shall not affect the other provisions hereof, and the Agreement
shall be construed in all respects as if such invalid or unenforceable provision
were omitted.
(b) No change or modification of this Agreement shall be valid unless
the same be in writing and signed by the party against whom the said
modification is to be enforced.
(c) This agreement shall be governed by and construed in accordance
with the laws of the Commonwealth of Pennsylvania.
IN WITNESS WHEREOF, Wayne has caused this Incentive Option Agreement to
be duly executed by its officers thereunto duly authorized, and the Employee has
hereunto set his hand and seal, all on the day and year first above written.
ATTEST NORWOOD FINANCIAL CORP.
(Corporate seal)
_____________________ By:________________________________
Pauline A. Kovatch William W. Davis, Jr.
Assistant Secretary President and CEO
________________________________
Employee
- 3 -
<PAGE>
NORWOOD FINANCIAL CORP. STOCK OPTION PLAN
NOTICE OF EXERCISE OF GRANTED OPTIONS
Pursuant to the Incentive Stock Option Agreement (the "Agreement")
entered into on the day of , 199__ between Norwood Financial Corp. (Norwood) and
(Employee), notice is hereby given of my election to purchase _________________
shares at per share as granted to me under the Agreement (copy attached).
Accompanying this notice is payment of $___________ which represents the full
purchase price of the shares covered by this election.
_____ In accordance with Paragraph 5 of the Agreement, I request that the
shares be registered in my name.
_____ In accordance with Paragraph 5 of the Agreement, I request that the
shares be registered in joint name, with right of survivorship, with my
spouse, ________________________.
________________________________
Employee
________________________________
Date
Check one of the following:
_____ This exercise represents the total shares granted to me under the
above Agreement.
_____ This exercise represents _____ shares of the total share granted to me
under the above Agreement. I have _____ shares remaining that I may
exercise within the period covered by the Agreement.
EXHIBIT 5.1
Opinion of Malizia, Spidi, Sloane & Fisch, P.C. as to
the validity of the Common Stock being registered
<PAGE>
MALIZIA, SPIDI, SLOANE & FISCH, P.C.
ATTORNEYS AT LAW
1301 K STREET, N.W.
SUITE 700 EAST
WASHINGTON, D.C. 20005
(202) 434-4660
FACSIMILE: (202) 434-4661
WRITER'S DIRECT DIAL NUMBER
August 11, 1998
Board of Directors
Norwood Financial Corp.
717 Main Street
Honesdale, Pennsylvania 18431
RE: Registration Statement on Form S-8:
Norwood Financial Corp. Stock Option Plan
Board Members:
We have acted as special counsel to Norwood Financial Corp., a
Pennsylvania corporation (the "Company"), in connection with the preparation of
the Registration Statement on Form S-8 to be filed with the Securities and
Exchange Commission (the "Registration Statement") under the Securities Act of
1933, as amended, relating to 500,000 shares of common stock, par value $.10 per
share (the "Common Stock") of the Company which may be issued upon the exercise
of options granted or which may be granted under the Norwood Financial Corp.
Stock Option Plan (the "Plan"), as more fully described in the Registration
Statement. You have requested the opinion of this firm with respect to certain
legal aspects of the proposed offering.
We have examined such documents, records, and matters of law as we have
deemed necessary for purposes of this opinion and based thereon, we are of the
opinion that the Common Stock when issued pursuant to the exercise of options
granted under and in accordance with the terms of the Plan will be duly and
validly issued, fully paid, and nonassessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to references to our firm included under the caption
"Legal Opinion" in the Prospectus which is a part of the Registration Statement.
Sincerely,
/s/ Malizia, Spidi, Sloane & Fisch, P.C.
Malizia, Spidi, Sloane & Fisch, P.C.
EXHIBIT 23.2
Consent of Independent Auditors
<PAGE>
EXHIBIT 23.2
CONSENT OF INDEPENDENT AUDITORS
We hereby consent to the incorporation by reference in this
Registration Statement on Form S-8, pertaining to the Norwood Financial Corp.
Stock Option Plan, of our report dated January 30, 1998, relating to the 1997
consolidated financial statements of Norwood Financial Corp. appearing in the
Company's Annual Report on Form 10-K for the year ended December 31, 1997.
/s/ BEARD & COMPANY, INC.
BEARD & COMPANY, INC.
Harrisburg, Pennsylvania
August 11, 1998
