(e) Prior to the date of this Agreement, William Penn has made available to Mid Penn true and correct copies of the articles of incorporation and bylaws of William Penn and similar governing documents of William Penn Bank and each other William Penn Subsidiary, each as in effect on the date hereof. 4.2. Capitalization. (a) The authorized capital stock of William Penn consists of One Hundred and Fifty Million 150,000,000 shares of William Penn Common Stock, $0.01 par value per share, and Fifty Million 50,000,000 shares of preferred stock, $0.01 par value per share. As of the date of this Agreement, there are (i) 9,208,217 shares of William Penn Common Stock issued and outstanding, (ii) zero shares of William Penn Preferred Stock issued and outstanding, (iii) zero shares of William Penn Common Stock held by William Penn as Treasury Stock and (iv) 1,264,000 shares of William Penn Common Stock reserved for issuance upon exercise of outstanding stock options or otherwise. All of the issued and outstanding shares of William Penn Common Stock have been duly authorized and validly issued, are fully paid, nonassessable and free of preemptive rights. Except as set forth on William Penn Disclosure Schedule 4.2(a), as of the date of this Agreement, no bonds, debentures, notes or other indebtedness having the right to vote on any matters on which shareholders may vote (“Voting Debt”) of William Penn, nor any trust preferred or subordinated debt securities of William Penn, are issued or outstanding. Except as set forth on William Penn Disclosure Schedule 4.2(a), there are no outstanding subscriptions, options, warrants, puts, calls, rights, exchangeable or convertible securities or other commitments or agreements of any character relating to the issued or unissued capital stock or other securities of William Penn, or otherwise obligating William Penn to issue, transfer, sell, purchase, redeem, or otherwise acquire, to register under the Securities Act and the rules and regulations of the SEC thereunder, or to pay a dividend on any such securities. Except for the William Penn Affiliate Letters, to William Penn’s Knowledge, there are no voting trusts, shareholder agreements, proxies or other agreements in effect with respect to the voting or transfer of the William Penn Common Stock or other equity interests of William Penn. (b) William Penn owns all of the capital stock of William Penn Bank, free and clear of any Lien. Except for the William Penn Subsidiaries, William Penn does not possess, directly or indirectly, any material equity interest in any corporate entity, except for equity interests held in the investment portfolios of William Penn Subsidiaries, equity interests held by William Penn Subsidiaries in a fiduciary capacity, and equity interests held in connection with the lending or borrowing activities of William Penn Subsidiaries, including stock in the FHLB and Atlantic Community Bankers Bank. Either William Penn or William Penn Bank owns all of the outstanding shares of capital stock or equity interests of each William Penn Subsidiary free and clear of all Liens. (c) To William Penn’s Knowledge, except as set forth on William Penn Disclosure Schedule 4.2(c), as of the date of this Agreement no Person or “group” (as that term is used in Section 13(d)(3) of the Exchange Act) is the beneficial owner (as defined in Section 13(d) of the Exchange Act) of five percent (5%) or more of the outstanding shares of William Penn Common Stock. (d) All contractual or other rights or obligations (including preemptive rights) of William Penn to purchase or sell any shares of capital stock, partnership, membership or joint venture interests, or other equitable interests in any Person are set forth on William Penn Disclosure Schedule 4.2(d). 4.3. Authority; No Violation. (a) William Penn has full corporate power and authority to execute and deliver this Agreement and, subject to the receipt of the Regulatory Approvals and the approval of this Agreement by William Penn’s shareholders, to consummate the transactions contemplated hereby. The execution and delivery of this Agreement by William Penn and the consummation by William Penn of the transactions contemplated hereby, including the Merger, have been duly and validly approved by the Board of Directors of William Penn, and no other corporate proceedings on the part of William Penn, except for the approval of the William Penn shareholders, the execution and delivery of the Bank Plan of Merger by William Penn Bank and the consent of the sole shareholder of A-17
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