PWOD 8-K filed 2024 · insiderdelta

Item 1.01

Entry into a Material Definitive Agreement.

On December 16, 2024, Penns Woods Bancorp, Inc.,
a Pennsylvania corporation (“Penns Woods”), and Northwest Bancshares, Inc., a Maryland corporation (“Northwest”),
entered into an Agreement and Plan of Merger (the “Merger Agreement”). The Merger Agreement provides that, under the terms
and subject to the conditions set forth therein, Penns Woods will merge with and into Northwest (the “Merger”), with Northwest
as the surviving corporation. Immediately after the effective time of the Merger (the “Effective Time”), or at such later
time as Northwest determines, Penns Woods’ wholly-owned subsidiary banks, Jersey Shore State Bank, a Pennsylvania-chartered bank
(“Jersey Shore State Bank”) and Luzerne Bank, a Pennsylvania-chartered bank (“Luzerne Bank”), will each merge
with and into Northwest Bank, a Pennsylvania-chartered savings bank and wholly-owned subsidiary of Northwest (“Northwest Bank”),
with Northwest Bank as the surviving bank. The boards of directors of both Northwest and Penns Woods unanimously approved the Merger Agreement
and the transactions contemplated thereby.

Under the terms and subject to the conditions of
the Merger Agreement, at the Effective Time, each share of Penns Woods common stock, $5.55 par value (“Penns Woods Common Stock”),
issued and outstanding immediately prior to the Effective Time will be converted into a right to receive 2.385 shares (the “Exchange
Ratio”) of Northwest common stock, $0.01 par value (“Northwest Common Stock”). Holders of Penns Woods Common Stock will
receive cash in lieu of fractional shares. Additionally, at the Effective Time, options that are outstanding under Penns Woods’
equity incentive plans immediately prior to the Effective Time will vest in full and be converted automatically into the right to receive
a cash payment in an amount calculated under the Merger Agreement.

The merger is intended to be a tax-free reorganization
under Section 368(a) of the Internal Revenue Code.

Under the Merger Agreement, Northwest has agreed
to appoint, effective as of the Effective Time, Richard A. Grafmyre, Penns Woods’ Chief Executive Officer and a Penns Woods director,
to Northwest’s board of directors in the class of directors scheduled for election in 2026, subject to Northwest’s standard
corporate governance practices and standard director evaluation process. Additionally, Northwest has agreed, subject to its standard corporate
governance practices, to renominate and recommend Mr. Grafmyre for re-election at the next applicable annual meeting of Northwest’s
shareholders following the Effective Time. If Mr. Grafmyre does not satisfy Northwest’s director eligibility requirements,
resigns, or elects not to be nominated for re-election, Northwest will select, in consultation with the former Penns Woods directors,
one of the former Penns Woods directors to be nominated as replacement, subject to Northwest’s standard corporate governance practices.
Mr. Grafmyre, or any replacement director, will also serve as a member of the board of directors of Northwest Bank concurrently with
service as a director of Northwest.

The Merger Agreement contains customary representations
and warranties by both Penns Woods and Northwest, and each party has agreed to customary covenants from the date of the Agreement until
the Effective Time, including, in the case of Penns Woods, covenants relating to its obligation to convene a meeting of its shareholders
to consider and vote on the Merger Agreement, a recommendation by the board of directors in favor of the approval of the Merger Agreement,
and an agreement not to solicit alternative business combination transactions.

The Merger is expected to close in the third quarter
of 2025, pending satisfaction of various customary closing conditions, including, but not limited to: (i) approval of the Merger
Agreement by Penns Woods shareholders; (ii) listing on NASDAQ of the Northwest Common Stock to be issued in the Merger; (iii) receipt
of required regulatory approvals; (iv) effectiveness of the registration statement on Form S-4 to be filed by Northwest; and
(v) the absence of any order, injunction or other legal restraint preventing or making illegal the completion of the Merger or any
of the other transactions contemplated by the Merger Agreement. Each party’s obligation to complete the Merger is also subject to
certain additional customary conditions, including, but not limited to, (a) subject to certain qualifications, the accuracy of certain
representations and warranties of Penns Woods, in the case of Northwest, and of Northwest, in the case of Penns Woods and (b) performance
in all material respects by Penns Woods, in the case of Northwest, and by Northwest, in the case of Penns Woods, of its obligations under
the Merger Agreement.

Either Penns Woods or Northwest may terminate
the Merger Agreement by mutual agreement or if, among certain other circumstances, (i) the Merger has not become effective on
or before December 31, 2025, unless the failure to of the closing to occur by such date shall be due to the failure of the
party seeking to terminate the Merger Agreement to perform or observe its obligations, covenants and agreements under the Merger
Agreement or (ii) Penns Woods shareholders fail to approve the Merger Agreement. The Merger Agreement may also be terminated by
Penns Woods if, at any time during the five-day period commencing on the date (the “Determination Date”) on which all
regulatory approvals for the Merger have been received (disregarding any waiting period) (i) the average of the volume weighted
daily closing sales prices of Northwest Common Stock for the ten consecutive trading days preceding the Determination Date has
declined by more than twenty percent from the average volume weighted daily closing sale prices of Northwest Common Stock for the
twenty trading days preceding the date of the Agreement and (ii) such decline exceeds by more than twenty percent the decline
in the NASDAQ Bank Index over the same period; provided that no termination will occur under this provision if Northwest elects to
increase the Exchange Ratio in the manner provided in the Merger Agreement. Penns Woods may terminate the Merger Agreement under
certain other circumstances, including if, prior to the receipt of shareholder approval of the Merger Agreement, the board of
directors elects to pursue, on the terms and conditions set forth in the Merger Agreement, another acquisition proposal that
constitutes a “superior proposal” as defined in the Merger Agreement. Northwest may terminate the Merger Agreement under
certain other circumstances, including if the Penns Woods board of directors fails to include a recommendation to shareholders to
approve the Merger Agreement or withdraws, modifies or qualifies such recommendation or if Penns Woods breaches its obligations
related to confidentiality or non-solicitation of alternative transactions. In the event that, prior to the termination of the
Merger Agreement, a bona fide takeover proposal has been made known to Penns Woods or its shareholders and not unconditionally
withdrawn, and thereafter the Merger Agreement is terminated by Northwest under certain circumstances and Penns Woods enters into an
alternative transaction within twelve months following termination of the Agreement, then Penns Woods must pay Northwest a
termination fee equal to $10.0 million. Also, in the event that the Merger Agreement is terminated by Penns Woods or Northwest
because Penns Woods has authorized the acceptance of a “superior proposal” on the terms permitted by the Merger
Agreement or the Merger Agreement is terminated by Northwest because Penns Woods has failed to recommend the transaction on terms
required by the Merger Agreement, then Penns Woods must, within two business days following such termination, pay Northwest the
termination fee of $10.0 million.

2

In connection with entering into the Merger Agreement,
Northwest entered into customary support agreements with all Penns Woods directors in their capacities as shareholders of Penns Woods.
Subject to the terms and conditions of the support agreements, each such shareholder has agreed, among other things, to vote all shares
of Penns Woods Common Stock beneficially owned by such individuals in favor of the Merger and against any alternative acquisition proposal.
The support agreements will terminate under certain circumstances, including upon completion of the Merger or termination of the Merger
Agreement in accordance with its terms.

The foregoing description of the Merger Agreement
does not purport to be complete and is qualified in its entirety by reference to the full text of the Merger Agreement, a copy of which
is attached as Exhibit 2.1 to this Current Report on Form 8-K and is incorporated herein by reference. The Merger Agreement
has been attached as an exhibit to provide investors and security holders with information regarding its terms. It is not intended to
provide any further financial information about Northwest or its subsidiaries or affiliates. The representations, warranties and covenants
contained in the Merger Agreement were made only for purposes of that agreement and as of specific dates, are solely for the benefit of
the parties to the Merger Agreement, may be subject to limitations agreed upon by the parties, including being qualified that confidential
disclosures made for the purposes of allocating contractual risk between the parties to the Merger Agreement instead of establishing these
matters as facts, and may be subject to standards of materiality applicable to the parties that differ from those applicable to investors.
Investors should not rely on the representations, warranties or covenants or any description thereof as characterizations of the actual
state of facts or condition of Northwest, Penns Woods or any of their respective subsidiaries or affiliates. Moreover, information concerning
the subject matter of the representations, warranties and covenants may change after the date of the Merger Agreement, which subsequent
information may not be fully reflected in public disclosures by Northwest.

The Merger Agreement should not be read alone,
but should instead be read in conjunction with the other information regarding Penns Woods, Northwest, their respective affiliates or
their respective businesses, the Merger Agreement and the Merger that will be contained in, or incorporated by reference into, the registration
statement on Form S-4 that will include a proxy statement of Penns Woods and a prospectus of Northwest, as well as in the Forms 10-K,
Forms 10-Q, Forms 8-K and other filings that each of Penns Woods and Northwest make with the Securities and Exchange Commission (“SEC”).

Additional Information About the Merger

In connection with the proposed transaction, Northwest will file
a registration statement on Form S-4 with the SEC to register the shares of Northwest’s common stock to be issued to the shareholders
of Penns Woods. The registration statement will include a proxy statement/prospectus, which will be sent to the shareholders of Penns
Woods in advance of the special meeting of shareholders that will be held to consider the proposed merger. PENNS WOODS INVESTORS AND SECURITY
HOLDERS ARE URGED TO READ THE PROXY STATEMENT/PROSPECTUS AND ANY OTHER RELEVANT DOCUMENTS TO BE FILED WITH THE SEC IN CONNECTION WITH
THE PROPOSED TRANSACTION BECAUSE THEY CONTAIN IMPORTANT INFORMATION ABOUT NORTHWEST, PENNS WOODS AND THE PROPOSED TRANSACTION. Investors
and security holders may obtain a free copy of these documents (when available) through the website maintained by the SEC at www.sec.gov.
These documents may also be obtained, without charge, by directing a request to Penns Woods Bancorp, Inc., 300 Market Street, Williamsport,
Pennsylvania 17701, Attn: Investor Relations.

Northwest and Penns Woods and certain of their directors and executive
officers may be deemed to be participants in the solicitation of proxies from the shareholders of Penns Woods in connection with the proposed
merger. Information about the directors and executive officers of Northwest is set forth in the proxy statement for Northwest’s
2024 annual meeting of shareholders, as filed with the SEC on Schedule 14A on March 8, 2024. Information about the directors and
executive officers of Penns Woods is set forth in the proxy statement for Penns Woods’ 2024 annual meeting of shareholders, as filed
with the SEC on a Schedule 14A on March 26, 2024. Additional information regarding the interests of those participants and other
persons who may be deemed participants in the transaction may be obtained by reading the proxy statement/prospectus regarding the proposed
merger when it becomes available. Free copies of this document may be obtained as described in the preceding paragraph.

3

This communication is not intended to and shall not constitute an offer
to sell or the solicitation of an offer to buy securities nor shall there be any sale of securities in any jurisdiction in which such
offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction. This
communication is also not a solicitation of any vote in any jurisdiction pursuant to the proposed transactions or otherwise. No offer
of securities or solicitation will be made except by means of a prospectus meeting the requirements of Section 10 of the Securities
Act of 1933, as amended.

Cautionary Statements Regarding Forward-Looking Information

Certain statements contained in this communication, which are not statements
of historical fact, constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.
Such statements include, but are not limited to, certain plans, expectations, goals, projections and benefits relating to the Merger between
Northwest and Penns Woods, which are subject to numerous assumptions, risks and uncertainties. Words or phrases such as “anticipate,”
“believe,” “aim,” “can,” “conclude,” “continue,” “could,” “estimate,”
“expect,” “foresee,” “goal,” “intend,” “may,” “might,” “outlook,”
“possible,” “plan,” “predict,” “project,” “potential,” “seek,”
“should,” “target,” “will,” “will likely,” “would,” or the negative of these
terms or other comparable terminology, as well as similar expressions, are intended to identify forward-looking statements but are not
the exclusive means of identifying such statements. Please refer to each of Northwest’s and Penns Woods’ Annual Report on
Form 10-K for the year ended December 31, 2023, as well as their other filings with the SEC for a more detailed discussion of
risks, uncertainties and factors that could cause actual results to differ from those discussed in the forward-looking statements.

Forward-looking statements are not historical facts but instead express
only management’s beliefs regarding future results or events, many of which, by their nature, are inherently uncertain and outside
of the management’s control. It is possible that actual results and outcomes may differ, possibly materially, from the anticipated
results or outcomes indicated in these forward-looking statements. In addition to factors disclosed in reports filed by Northwest and
Penns Woods with the SEC, risks and uncertainties for Northwest, Penns Woods and the combined company include, but are not limited to:
the possibility that any of the anticipated benefits of the proposed merger will not be realized or will not be realized within the expected
time period; the risk that integration of Penns Woods operations with those of Northwest will be materially delayed or will be more costly
or difficult than expected; the parties’ inability to meet expectations regarding the timing, completion and accounting and tax
treatments of the merger; the inability to complete the merger due to the failure of Penns Woods’ shareholders to adopt the Merger
Agreement; the failure to satisfy other conditions to completion of the Merger, including receipt of required regulatory and other approvals;
the failure of the proposed transaction to close for any other reason; diversion of management's attention from ongoing business operations
and opportunities due to the Merger; the challenges of integrating and retaining key employees; the effect of the announcement of the
Merger on Northwest’s, Penns Woods’ or the combined company’s respective customer and employee relationships and operating
results; the possibility that the Merger may be more expensive to complete than anticipated, including as a result of unexpected factors
or events; dilution caused by Northwest’s issuance of additional shares of Northwest Common Stock in connection with the Merger;
results of operations and financial condition of Northwest, Penns Woods and the combined company; and general competitive, economic, political
and market conditions and fluctuations. All forward-looking statements included in this communication are made as of the date hereof and
are based on information available at that time. Except as required by law, neither Northwest nor Penns Woods assumes any obligation to
update any forward-looking statement to reflect events or circumstances that occur after the date the forward-looking statements were
made.
PWOD Penns Woods Bancorp Inc - 8-K

Item 1.01 - Entry into a Material Definitive Agreement

Item 9.01 - Financial Statements and Exhibits
