(4) With respect to those individuals who, subsequent to the Merger, will be subject to the reporting requirements under Section 16(a) of the Exchange Act, where applicable, Mid Penn shall administer the William Penn Benefit Plans in a manner consistent with the exemptions provided by Rule 16b-3 promulgated under the Exchange Act. (f) Restricted Stock. At the Effective Time, each restricted stock award granted by William Penn (“William Penn Restricted Stock”) which is outstanding immediately prior to the Effective Time and with respect to which the applicable restrictions have not yet lapsed, shall be assumed by Mid Penn and, thereafter, each such assumed award for William Penn Restricted Stock shall continue to be subject to the terms of the applicable William Penn Benefit Plan or other agreement by which it is evidenced, except that from and after the Effective Time, (i) Mid Penn and a disinterested committee of the Mid Penn board of directors shall be substituted for William Penn and the committee of the William Penn board of directors administering such William Penn Benefit Plan and (ii) the number of shares of Mid Penn Common Stock subject to each William Penn Restricted Stock award agreement shall be equal to the number of shares of William Penn Common Stock subject to such award assumed immediately prior to the Effective Time multiplied by the Exchange Ratio, provided that any fractional shares of Mid Penn Common Stock resulting from such multiplication shall be rounded down to the nearest share. William Penn Disclosure Schedule 3.1(f) sets forth a listing of all William Penn Restricted Stock Awards outstanding on the date hereof, the name of the holder, date of issuance, number of shares and vesting schedule. (g) In the event Mid Penn changes the number of shares of Mid Penn Common Stock issued and outstanding between the date hereof and the Effective Time as a result of a stock split, stock dividend, extraordinary dividend, recapitalization, reclassification, split up, combination, merger, issuer tender offer, exchange of shares, readjustment or similar capitalization change and the record date therefor shall be prior to the Effective Time, the Merger Consideration shall be proportionately adjusted to give William Penn and the holders of William Penn Common Stock the same economic effect as contemplated by this Agreement prior to such events. In addition, in the event Mid Penn enters into an agreement pursuant to which shares of Mid Penn Common Stock would be converted into shares or other securities or obligations of another corporation, proper provision shall be made in such agreement so that each holder of William Penn Common Stock entitled to receive shares of Mid Penn Common Stock in the Merger shall be entitled to receive such number of shares or other securities or amount or obligations of such other corporation as such shareholder would be entitled to receive if the Effective Time had occurred immediately prior to the happening of such event. (h) Notwithstanding anything to the contrary contained herein, no certificates or scrip representing fractional shares of Mid Penn Common Stock shall be issued upon the surrender for exchange of Certificates, no dividend or distribution with respect to Mid Penn Common Stock shall be payable on or with respect to any fractional share interest, and such fractional share interests shall not entitle the owner thereof to vote or to any other rights of a shareholder of Mid Penn. In lieu of the issuance of any such fractional share, Mid Penn shall pay to each former holder of William Penn Common Stock who otherwise would be entitled to receive a fractional share of Mid Penn Common Stock, an amount in cash, rounded to the nearest cent and without interest, equal to the product of (i) the fraction of a share (after taking into account all shares of William Penn Common Stock held by such holder immediately prior to the Effective Time) of Mid Penn Common Stock to which such holder would otherwise have been entitled pursuant to this Section 3.1 and (ii) the closing sale price of Mid Penn Common Stock on the fifth (5th) Business Day prior to the Closing Date. For purposes of determining any fractional share interest, all shares of William Penn Common Stock owned by a William Penn shareholder shall be combined so as to calculate the maximum number of whole shares of Mid Penn Common Stock issuable to such William Penn shareholder. The parties acknowledge that the payment of such cash consideration in lieu of issuing fractional shares is not separately bargained-for consideration, but merely represents a mechanical rounding off for purposes of avoiding the expense and inconvenience that would otherwise be caused by the issuance of fractional shares. A-13
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