Because of this, each institution’s existing shareholders will have less influence on the management and policies of Mid Penn than they now have on the management and policies of the institution in which they currently own shares. Shareholders may be unable to timely sell shares after completion of the merger. There will be a time period between the completion of the merger and the time at which former William Penn shareholders actually receive their shares of Mid Penn common stock. Until shares are received, former William Penn shareholders may not be able to sell their Mid Penn shares in the open market and, therefore, may not be able to avoid losses resulting from any decrease, or secure gains resulting from any increase, in the trading price of Mid Penn common stock during this period. The merger agreement limits William Penn’s ability to pursue alternatives to the merger. The merger agreement contains “no shop” provisions that, subject to specified exceptions, limit William Penn’s ability to discuss, facilitate or commit to competing third-party proposals to acquire all or a significant part of William Penn. In addition, a termination fee is payable by William Penn under certain circumstances, generally involving the decision to pursue an alternative transaction. These provisions might discourage a potential competing acquiror that might have an interest in acquiring all or a significant part of William Penn from considering or proposing that acquisition, even if it were prepared to pay consideration with a higher per share value than that proposed in the merger, or might result in a potential competing acquiror proposing to pay a lower per share price to acquire William Penn than it might otherwise have proposed to pay, if the merger with Mid Penn had not been announced. William Penn shareholders will not have appraisal or dissenters’ rights in the merger. Appraisal or dissenters’ rights are statutory rights that, if applicable, enable shareholders to dissent from an extraordinary transaction, such as a merger, and to demand that the corporation pay the fair value for their shares as determined by a court in a judicial proceeding instead of receiving the consideration offered to shareholders in that extraordinary transaction. Under Maryland General Corporation Law, holders of William Penn common stock are not entitled to appraisal rights in the merger with respect to their shares of William Penn common stock. Required regulatory waivers and approvals may not be received in a timely manner, or at all, and may impose materially burdensome conditions that prevent the merger from being completed. Before the transactions contemplated in the merger agreement, including the merger, may be completed, various waivers, approvals or consents must be obtained from various bank regulatory and other authorities, including the Board of Governors of the Federal Reserve System, the FDIC, and the Pennsylvania Department of Banking and Securities. In determining whether to grant these approvals, regulatory authorities consider a variety of factors, including the regulatory standing of each party. These approvals could be delayed or not obtained at all, including due to any or all of the following: an adverse development in any party’s regulatory standing or any other factors considered by regulators in granting such approvals; governmental, political, or community group inquiries, investigations or opposition; or changes in legislation or the political or regulatory environment generally, including as a result of changes of the U.S. executive administration, or Congressional leadership and regulatory agency leadership. Even if the approvals are granted, they may impose terms and conditions, limitations, obligations or costs, or place restrictions on the conduct of the combined company’s business or require changes to the terms of the transactions contemplated by the merger agreement. There can be no assurance that regulators will not impose any such conditions, limitations, obligations, or restrictions or that such conditions, limitations, or restrictions will not have the effect of preventing or delaying the completion of any of the transactions contemplated by the 40
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