TABLE OF CONTENTS QUESTIONS AND ANSWERS ABOUT THE MERGER AND THE SPECIAL MEETINGS . . . . . . . . . . . 1 Questions about the Merger ............................................................. 1 Questions about the Mid Penn Special Meeting .............................................. 4 Questions about the William Penn Special Meeting ........................................... 8 SUMMARY ........................................................................... 13 UNAUDITED PRO FORMA COMBINED CONSOLIDATED FINANCIAL INFORMATION . . . . . . . . . 22 RISKFACTORS........................................................................ 39 CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS . . . . . . . . . . . . . . 47 THEMERGER ......................................................................... 49 Background of the Merger .............................................................. 49 William Penn’s Reasons for the Merger .................................................... 53 Recommendation of William Penn’s Board of Directors ....................................... 57 Opinion of William Penn’s Financial Advisor ............................................... 57 Mid Penn’s Reasons for the Merger ....................................................... 70 Recommendation of Mid Penn’s Board of Directors .......................................... 72 Opinion of Keefe, Bruyette & Woods, Inc. to Mid Penn’s Board of Directors ...................... 72 Certain Prospective Financial Information of the Parties ...................................... 84 Board of Directors and Management of Mid Penn Following Completion of the Merger .............. 87 Regulatory Approvals Required for the Merger .............................................. 88 INTERESTS OF WILLIAM PENN’S DIRECTORS AND EXECUTIVE OFFICERS IN THE MERGER ........................................................................... 89 Treatment of Stock Options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89 Treatment of Restricted Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89 Change in Control Agreements with Alan B. Turner, Jeannine Cimino, Amy J. Logan (Hannigan) and JonathanT.Logan ................................................................... 89 Employment Agreement with Kenneth J. Stephon . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90 Indemnification ....................................................................... 91 Directors’ and Officers’ Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91 THEMERGERAGREEMENT ............................................................ 92 Terms of the Merger ................................................................... 92 Closing and Effective Time of the Merger .................................................. 92 Consideration to Be Received in the Merger ................................................ 92 Conversion of Shares; Letter of Transmittal; Exchange of Certificates ............................ 93 Dividends and Distributions ............................................................. 94 Representations and Warranties .......................................................... 94 Covenants and Agreements .............................................................. 96 William Penn Bank Post-Closing Operation ................................................ 100 Shareholder Meetings .................................................................. 100 Agreement Not to Solicit Other Offers ..................................................... 100 Expenses and Fees .................................................................... 102 Indemnification and Insurance ........................................................... 103 Conditions to Complete the Merger ....................................................... 103 Termination of the Merger Agreement ..................................................... 104 Termination Fee ...................................................................... 105 Amendment, Waiver and Extension of the Merger Agreement ................................... 105 ACCOUNTINGTREATMENT ............................................................ 107 MATERIAL UNITED STATES FEDERAL INCOME TAX CONSEQUENCES OF THE MERGER . . . . . 108 THEMIDPENNSPECIALMEETING...................................................... 111 MIDPENNSPECIALMEETING—PROPOSALNO.1 ........................................ 113 MID PENN SHARE ISSUANCE PROPOSAL PURSUANT TO THE MERGER AGREEMENT . . . . . . . . 113 iii
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