Over the following weeks, Mid Penn conducted due diligence on William Penn and William Penn conducted reverse due diligence on Mid Penn. During this time, Mid Penn also continued to explore the advisability of engaging in a capital raise in order to further support its continued growth. On October 4, 2024, Mid Penn’s legal counsel, Pillar Aught LLC (“Pillar+Aught”), distributed an initial draft of the merger agreement to Kilpatrick. Over the following weeks, multiple drafts of the merger agreement, and the exhibits and schedules thereto, were exchanged and representatives of Kilpatrick and Mid Penn’s legal counsel participated in calls to discuss open issues, which included deal protections, termination fees, the conduct of William Penn’s business prior to closing, certain representations and warranties and employee matters. Among the employee matters discussed was the nature of a prospective role for Mr. Stephon with the combined organization and the compensation to be paid for his services, the product of which was the negotiation of a new employment agreement among William Penn, Mid Penn and Mr. Stephon. The material terms of Mr. Stephon’s employment agreement are described in the section of this joint proxy statement/prospectus entitled “Interests of William Penn’s Directors and Executive Officers in the Merger – Employment Agreement with Kenneth J. Stephon”. On October 14, 2024, Mid Penn notified William Penn that it intended to conduct a public offering with a base amount of approximately $50 million of Mid Penn common stock and, that while independent from the merger, the offering would be announced at the same time as the announcement of the proposed business combination between Mid Penn and William Penn. Mid Penn further notified William Penn that the closing of the proposed merger with William Penn would not be contingent on the completion of the offering. Mid Penn communicated to William Penn that it intended to use the net proceeds from the public offering to support its continued growth, for the potential redemption of subordinated debt, to support future strategic transactions and for other general corporate purposes. Mid Penn subsequently advised William Penn that it intended to increase the base amount of the public offering from approximately $50 million to approximately $75 million of Mid Penn common stock. At its regularly scheduled meeting on October 23, 2024, representatives of Stephens participated in the meeting and presented the Mid Penn board with an updated executive summary of the proposed transaction with William Penn, including a review of various preliminary pro forma financial metrics, key assumptions considered in developing those metrics and the financial impact of the contemplated capital raise on Mid Penn. Representatives of Stephens and members of senior management of Mid Penn responded to questions posed by directors throughout the presentation. On October 31, 2024, the William Penn board of directors met, with representatives of Piper Sandler and Kilpatrick in attendance, to consider the approval of the merger agreement and the transactions contemplated by the merger agreement. Before the meeting, management distributed to each director the proposed merger agreement and a financial presentation prepared by Piper Sandler. Representatives of Piper Sandler reviewed in detail the pricing and other financial terms of the proposed merger agreement. Kilpatrick reviewed in detail the terms and conditions of the proposed merger agreement, including, but not limited to, the transaction structure, the representations, warranties and covenants made by William Penn and Mid Penn, the closing conditions, and the termination rights of William Penn and Mid Penn. The William Penn board of directors reviewed all aspects of the merger process, including William Penn’s then current financial position, performance and prospects, including its decision to pursue a strategic transaction, the process that was used to identify potential merger partners and solicit merger proposals, then current economic and stock market conditions, William Penn’s reverse due diligence investigation of Mid Penn, the terms and conditions of the proposed merger agreement, the implied value of the proposed merger consideration, the financial impact of Mid Penn’s accompanying public offering and the potential impact of the proposed merger on William Penn’s stockholders and other constituencies. Representatives of Piper Sandler provided the William Penn board of directors with a presentation that showed the financial impact of Mid Penn’s proposed public offering on the combined company and advised the board of directors that, while pro forma earnings per share of the combined company would be negatively impacted by the additional shares issued in the offering, the offering was beneficial to the pro forma company from a financial standpoint because it improved its capital ratios and commercial real estate concentration ratios and provided further potential growth opportunities. All questions posed by the directors were answered by management, representatives of Piper Sandler or Kilpatrick, 52
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