profit or committed a willful violation of any law, rule or regulation governing banking, securities, commodities or insurance, or any final cease and desist order issued by a banking, securities, commodities or insurance regulatory agency. Classes of Directors and Election of Directors Mid Penn. The Mid Penn board of directors is divided into three classes, with each class being elected annually for a three-year term. William Penn. The William Penn board of directors is divided into three classes with each class as nearly equal in number as reasonably possible. The term of office of each class, after the initial directors terms, the succeeding directors term expire at the third succeeding annual meeting of shareholders where a successor is duly elected and qualified. Filling Vacancies on the Board of Directors Mid Penn. Mid Penn’s bylaws provide that vacancies on the board of directors, including vacancies resulting from an increase in the number of directors, may be filled by a majority of the remaining members of the board, even though less than a quorum. Each person so elected to fill a vacancy in the board of directors will become a member of the same class of directors in which the vacancy existed. Each director so elected will be a director until the class to which he/she was appointed stands for election and until his or her successor is elected and qualified. William Penn. William Penn’s bylaws provide that vacancies on the board of directors resulting from an increase in the size of the board of directors or the death, resignation or removal of a director may be filled by the affirmative vote of the majority of the remaining directors in office, even if the remaining directors do not constitute a quorum. Any director elected to fill a vacancy will hold office for the remainder of the full term of the class of directors in which the vacancy occurred and until a successor is elected or qualified. Special Meetings of the Board of Directors Mid Penn. Special meetings of Mid Penn’s board of directors may be held whenever called by the Chairman of the Board or the Chief Executive Officer upon written request of three directors. Notice of the time and place of every special meeting may be either verbal or in writing, and will be given to each member of the board of directors at least twenty-four hours before the time of such meeting excepting the organization meeting following the election of directors. William Penn. Special meetings of William Penn’s board of directors may be held whenever called by the Chairman of the Board, the Chief Executive Officer, or by two-thirds (2/3) of the members of the board of directors after making the request in writing. Anti-Takeover Provisions and Other Shareholder Protections Mid Penn. Under Mid Penn’s articles of incorporation, any merger, consolidation, liquidation or dissolution of Mid Penn or any action that would result in the sale or other disposition of all or substantially all of the assets of Mid Penn must be approved by the affirmative vote of the holders of at least 80% of the outstanding shares of common stock, unless approved in advance by at least 80% of the board of directors, in which case such transaction requires shareholder approval to the extent required by the Pennsylvania Business Corporation Law or the rules of any national securities exchange on which shares of Mid Penn common stock are traded. The board may, if it deems advisable, oppose a tender or other offer for Mid Penn’s securities, whether the offer is in cash or in the securities of a corporation or otherwise. When considering whether to oppose an offer, the board may, but is not legally obligated to, consider whether the offer price is acceptable based on the historical and 122
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