• establish a retention bonus pool based upon the joint recommendation of the Chief Executive Officers of William Penn and Mid Penn, for key employees of William Penn or Mid Penn to help retain the services of such employees; • reserve a sufficient number of shares of its common stock and maintain sufficient liquid accounts or borrowing capacity to fulfill its obligations in connection with the merger; • not take any action, or knowingly fail to take any action, which action or failure to act prevents or impedes, or could reasonably be expected to prevent or impede, the merger from qualifying as a “reorganization” within the meaning of Section 368(a) of the Internal Revenue Code; and • obtain approval for listing of the shares of its common stock on Nasdaq. The merger agreement also contains mutual covenants relating to the preparation of this joint proxy statement/ prospectus, the regulatory applications, the holding of the special meetings of Mid Penn shareholders and William Penn shareholders, respectively, access to information of William Penn and public announcements with respect to the transactions contemplated by the merger agreement. William Penn and Mid Penn have also agreed to use commercially reasonable efforts to take all actions needed to obtain necessary governmental and thirdparty consents and to consummate the transactions contemplated by the merger agreement. William Penn Bank Post-Closing Operation Immediately, or as soon as reasonably practicable, after the consummation of the merger, in accordance with the bank plan of merger between William Penn Bank and Mid Penn Bank, William Penn Bank will merge with and into Mid Penn Bank, with Mid Penn Bank surviving such merger, and the separate corporate existence of William Penn Bank will cease. Shareholder Meetings Each of Mid Penn and William Penn has agreed to hold a meeting of its respective shareholders as promptly as practicable to obtain shareholder approval. Mid Penn’s board of directors has unanimously agreed to recommend that its shareholders vote in favor of the issuance by Mid Penn of shares of Mid Penn common stock to holders of common stock of William Penn in connection with the merger. William Penn’s board of directors has unanimously agreed to recommend that its shareholders vote in favor of the merger agreement, subject to certain qualifications and exceptions set forth in the merger agreement. Agreement Not to Solicit Other Offers William Penn has agreed that it will not, and that it will cause its subsidiaries not, and use its reasonable best efforts to cause each of their respective officers, directors, employees, representatives, agents, and affiliates not to, except as otherwise expressly permitted in the merger agreement, between the date of the merger agreement and the closing of the merger, directly or indirectly: • initiate, solicit, induce or encourage, or take any action to facilitate the making of, any inquiry, offer or proposal that constitutes or could reasonably be expected to lead to an alternative acquisition proposal; • respond to any inquiry relating to an alternative acquisition proposal; • recommend or endorse an alternative acquisition transaction; • participate in any discussions or negotiations regarding, or furnish or afford access to information or data to any person that may relate to an alternative acquisition proposal; • release anyone from, waive any provisions of, or fail to enforce any confidentiality agreement or standstill agreement to which William Penn is a party; or 100
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