POS AM

As filed with the Securities and Exchange Commission on September 11, 2009

Registration No. 333-156936

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

Post-Effective Amendment No. 1 to

FORM S-1

REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

PENN MILLERS HOLDING CORPORATION

(Exact name of registrant as specified in its charter)

Pennsylvania
(State or other jurisdiction of
incorporation or organization) 6331
(Primary Standard Industrial
Classification Code Number) 23-2994859
(I.R.S. Employer Identification
Number)

72 North Franklin Street
P.O. Box P
Wilkes-Barre, PA 18773-0016
(800) 822-8111

(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)

Douglas A. Gaudet
President and Chief Executive Officer
Penn Millers Holding Corporation
72 North Franklin Street
P.O. Box P
Wilkes-Barre, PA 18773-0016
(800) 822-8111

(Name, address, including zip code, and telephone number, including area code, of agent for service)

Copies to:

David L. Harbaugh, Esquire	Wesley R. Kelso, Esquire
Morgan, Lewis & Bockius LLP	John D. Talbot, Esquire
1701 Market Street	Stevens & Lee, P.C.
Philadelphia, PA 19103	620 Freedom Business Center,
(215) 963-5751	Suite 200
	King of Prussia, PA 19406
	(610) 205-6028

     Approximate date of commencement of proposed sale to the public: As soon as practicable after this Registration Statement becomes effective.

     If any of the securities being registered on this form are to be offered on a delayed or continuous basis pursuant to Rule 415 of the Securities Act of 1933, check the following box: þ

     If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act of 1933, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o

     If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act of 1933, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o

     If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act of 1933, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. þ

     Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer o Accelerated filer o  Non-accelerated filer þ
(Do not check if a smaller reporting company) Smaller reporting company o

     The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the registration statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

EXPLANATORY NOTE

     This Post-Effective Amendment No. 1 relates to the Registrant’s Registration Statement on Form S-1, as amended (File No. 333-156936), initially filed by the Registrant on January 26, 2009 and declared effective by the Securities and Exchange Commission on September 4, 2009. The Registrant is filing this Post-Effective Amendment No. 1 pursuant to Rule 462(d) under the Securities Act of 1933, as amended, solely to file exhibits to the Registration Statement on Form S-1, as amended (File No. 333-156936) and the definitive versions of certain other documents, the forms of which were previously filed. Pursuant to Rule 462(d), the contents of the Registration Statement on Form S-1, as amended (File No. 333-156936), including the exhibits and the power of attorney thereto, are incorporated by reference into this Post-Effective Amendment No. 1.

Item 15. Recent Sales of Unregistered Securities.

None.

Item 16. Exhibits and Financial Statement Schedules.

     (a) Exhibits

1.1	Form of Agency Agreement among Penn Millers Holding Corporation, Penn Millers Mutual Holding Company, PMHC Corp., Penn Millers Insurance Company and Griffin Financial Group, LLC
2.1	Plan of Conversion from mutual to stock form of Penn Millers Mutual Holding Company, dated as of April 22, 2009*
3.1	Articles of Incorporation of Penn Millers Holding Corporation*
3.2	Bylaws of Penn Millers Holding Corporation*
4.1	Form of certificate evidencing shares of common stock of Penn Millers Holding Corporation*
5.1	Opinion of Stevens & Lee regarding stock of Penn Millers Holding Corporation being issued*
8.1	Opinion of Stevens & Lee regarding certain United States federal income tax issues*
10.1	Penn Millers Stock Incentive Plan*
10.2	Employment Agreement between Penn Millers Mutual Holding Company, Penn Millers Holding Corporation, Penn Millers Insurance Company and Douglas A. Gaudet*
10.3	Employment Agreement between Penn Millers Mutual Holding Company, Penn Millers Holding Corporation, Penn Millers Insurance Company and Michael O. Banks*
10.4	Employment Agreement between Penn Millers Mutual Holding Company, Penn Millers Holding Corporation, Penn Millers Insurance Company and Kevin D. Higgins*
10.5	Employment Agreement between Penn Millers Mutual Holding Company, Penn Millers Holding Corporation, Penn Millers Insurance Company and Harold W. Roberts*
10.6	Employment Agreement, between Penn Millers Mutual Holding Company, Penn Millers Holding Corporation, Penn Millers Insurance Company and Frank Joanlanne*
10.7	Separation and General Release Agreement between Penn Millers Insurance Company, its affiliates and Frank Joanlanne*
10.8	Employment Agreement between Penn Millers Mutual Holding Company, Penn Millers Holding Corporation, Penn Millers Insurance Company and Jonathan C. Couch*
10.9	Separation and General Release Agreement between Eastern Insurance Group, Penn Millers Insurance Company, its affiliates and William H. Spencer, Jr.*
10.10	Whole Account Accident Year Aggregate Excess of Loss Reinsurance Contract*

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10.11	Property Catastrophe Excess of Loss Reinsurance Agreement*
10.12	Property & Casualty Excess of Loss Reinsurance Agreement*
10.13	Casualty Excess of Loss Reinsurance Agreement*
10.14	Umbrella Quota Share Reinsurance Contract*
10.15	Property Excess of Loss Reinsurance Contract*
10.16	Supplemental Executive Retirement Plan, as amended and restated, effective January 1, 2006*
10.17	Nonqualified Deferred Compensation and Company Incentive Plan, effective June 1, 2006*
10.18	Success Sharing Bonus Plan*
10.19	Penn Millers Holding Corporation Employee Stock Ownership Plan*
21.1	Subsidiaries of Penn Millers Holding Corporation*
23.1	Consent of KPMG LLP
23.2	Consent of Curtis Financial Group LLC*
23.3	Consent of Stevens & Lee (contained in Exhibits 5.1 and 8.1)*
24.1	Power of Attorney (contained on signature page)*
99.1	Pro Forma Valuation Appraisal Report, dated as of August 7, 2009, prepared for Penn Millers Mutual Holding Company by Curtis Financial Group LLC.*
99.2	Letter dated April 22, 2009, to Penn Millers Mutual Holding Company from Curtis Financial Group LLC regarding fair market value of subscription rights*
99.3	Stock Order Form
99.4	Question and Answer Brochure
99.5	Letters and statements to prospective purchasers of stock in offering
99.6	Form of Escrow Agreement between Penn Millers Holding Corporation and Christiana Bank & Trust Company*
99.7	Form of Penn Millers Mutual Holding Company Member Proxy Materials
99.8	Power of Attorney by Donald A. Pizer*

* Previously filed.

(b) Financial Statement Schedules

     The following schedules have been filed as a part of this Registration Statement and are included in the Registrant’s audited Financial Statements included in the prospectus at page F-1.

     Schedule II — Financial Information of Parent Company

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     Schedule III — Supplemental Insurance Information

     Schedule IV — Reinsurance

     Schedule V — Allowance for Uncollectible Premiums and Other Receivables

     Schedule VI — Supplemental Information

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Item 17. Undertakings.

     The undersigned registrant hereby undertakes:

     (1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement: (i) to include any prospectus required by Section 10(a)(3) of the Securities Act of 1933; (ii) to reflect in the prospectus any fact or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement; and (iii) to include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement.

     (2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

     (3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.

     The undersigned hereby undertakes to provide to the underwriter at the closing specified in the underwriting agreements certificates in such denominations and registered in such names as required by the underwriter to permit prompt delivery to each purchaser.

     Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the forgoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act of 1933 and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.

     The undersigned registrant hereby undertakes that:

     (1) For purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b) (1) or (4) or 497(h) under the Securities Act of 1933 shall be deemed to be part of this registration statement as of the time it was declared effective.

     (2) For the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

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SIGNATURES

     Pursuant to the requirements of the Securities Act of 1933, the Registrant has duly caused this Amendment No. 4 to Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Wilkes-Barre, Commonwealth of Pennsylvania, on September 9, 2009.

PENN MILLERS HOLDING CORPORATION
By:	/s/ Douglas A. Gaudet
	Douglas A. Gaudet, President and
	Chief Executive Officer

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     Pursuant to the requirements of the Securities Act of 1933, this Post-Effective Amendment No. 1 to Registration Statement has been signed below by the following persons in the capacities and on the dates indicated.

Signature	Capacity	Date
/s/ Douglas A. Gaudet Douglas A. Gaudet	Director President and Chief Executive Officer (Principal Executive Officer)	September 9, 2009
/s/ J. Harvey Sproul, Jr. * J. Harvey Sproul, Jr.	Director and Chairman	September 9, 2009
/s/ F. Kenneth Ackerman, Jr. * F. Kenneth Ackerman, Jr.	Director and Vice Chairman	September 9, 2009
/s/ Heather M. Acker * Heather M. Acker	Director	September 9, 2009
/s/ Dorrance R. Belin, Esq. * Dorrance R. Belin, Esq.	Director	September 9, 2009
/s/ John L. Churnetski * John L. Churnetski	Director	September 9, 2009
/s/ John M. Coleman * John M. Coleman	Director	September 9, 2009
/s/ Kim E. Michelstein * Kim E. Michelstein	Director	September 9, 2009
/s/ Robert A. Nearing, Jr. * Robert A. Nearing, Jr.	Director	September 9, 2009
/s/ Donald A. Pizer * Donald A. Pizer	Director	September 9, 2009
/s/ James M. Revie * James M. Revie	Director	September 9, 2009
/s/ Michael O. Banks Michael O. Banks	Treasurer and Chief Financial Officer and Chief Accounting Officer (Principal Financial and Accounting Officer)	September 9, 2009

* By Michael O. Banks
As Attorney In Fact
/s/ Michael O. Banks   Michael O. Banks

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EXHIBIT INDEX

1.1	Form of Agency Agreement among Penn Millers Holding Corporation, Penn Millers Mutual Holding Company, PMHC Corp., Penn Millers Insurance Company and Griffin Financial Group, LLC
2.1	Plan of Conversion from mutual to stock form of Penn Millers Mutual Holding Company, dated as of April 22, 2009*
3.1	Articles of Incorporation of Penn Millers Holding Corporation*
3.2	Bylaws of Penn Millers Holding Corporation*
4.1	Form of certificate evidencing shares of common stock of Penn Millers Holding Corporation*
5.1	Opinion of Stevens & Lee regarding stock of Penn Millers Holding Corporation being issued*
8.1	Opinion of Stevens & Lee regarding certain United States federal income tax issues*
10.1	Penn Millers Stock Incentive Plan*
10.2	Employment Agreement between Penn Millers Mutual Holding Company, Penn Millers Holding Corporation, Penn Millers Insurance Company and Douglas A. Gaudet*
10.3	Employment Agreement between Penn Millers Mutual Holding Company, Penn Millers Holding Corporation, Penn Millers Insurance Company and Michael O. Banks*
10.4	Employment Agreement between Penn Millers Mutual Holding Company, Penn Millers Holding Corporation, Penn Millers Insurance Company and Kevin D. Higgins*
10.5	Employment Agreement between Penn Millers Mutual Holding Company, Penn Millers Holding Corporation, Penn Millers Insurance Company and Harold W. Roberts*
10.6	Employment Agreement, between Penn Millers Mutual Holding Company, Penn Millers Holding Corporation, Penn Millers Insurance Company and Frank Joanlanne*
10.7	Separation and General Release Agreement between Penn Millers Insurance Company, its affiliates and Frank Joanlanne*
10.8	Employment Agreement between Penn Millers Mutual Holding Company, Penn Millers Holding Corporation, Penn Millers Insurance Company and Jonathan C. Couch*
10.9	Separation and General Release Agreement between Eastern Insurance Group, Penn Millers Insurance Company, its affiliates and William H. Spencer, Jr.*
10.10	Whole Account Accident Year Aggregate Excess of Loss Reinsurance Contract*
10.11	Property Catastrophe Excess of Loss Reinsurance Agreement*

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10.12	Property & Casualty Excess of Loss Reinsurance Agreement*
10.13	Casualty Excess of Loss Reinsurance Agreement*
10.14	Umbrella Quota Share Reinsurance Contract*
10.15	Property Excess of Loss Reinsurance Contract*
10.16	Supplemental Executive Retirement Plan, as amended and restated, effective January 1, 2006*
10.17	Nonqualified Deferred Compensation and Company Incentive Plan, effective June 1, 2006*
10.18	Success Sharing Bonus Plan*
10.19	Penn Millers Holding Corporation Employee Stock Ownership Plan*
21.1	Subsidiaries of Penn Millers Holding Corporation*
23.1	Consent of KPMG LLP
23.2	Consent of Curtis Financial Group LLC*
23.3	Consent of Stevens & Lee (contained in Exhibits 5.1 and 8.1)*
24.1	Power of Attorney (contained on signature page)*
99.1	Pro Forma Valuation Appraisal Report, dated as of August 7, 2009, prepared for Penn Millers Mutual Holding Company by Curtis Financial Group LLC.*
99.2	Letter dated April 22, 2009, to Penn Millers Mutual Holding Company from Curtis Financial Group LLC regarding fair market value of subscription rights*
99.3	Stock Order Form
99.4	Question and Answer Brochure
99.5	Letters and statements to prospective purchasers of stock in offering
99.6	Form of Escrow Agreement between Penn Millers Holding Corporation and Christiana Bank & Trust Company*
99.7	Form of Penn Millers Mutual Holding Company Member Proxy Materials
99.8	Power of Attorney by Donald A. Pizer*

* Previously filed.

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EX-1.1

Exhibit 1.1

PENN MILLERS HOLDING CORPORATION

Up to 6,772,221 Shares
COMMON STOCK ($0.01 Par Value)
Subscription Price $10.00 Per Share

AGENCY AGREEMENT

September 9, 2009

Griffin Financial Group, LLC
620 Freedom Business Center, Suite 210
King of Prussia, Pennsylvania 19406

Ladies and Gentlemen:

     Penn Millers Holding Corporation, a Pennsylvania corporation (“HoldCo”), Penn Millers Mutual Holding Company, a Pennsylvania mutual insurance holding company (in both mutual and converted stock form, “PMMHC”), PMHC Corp., a Pennsylvania corporation (“PMHC”), and Penn Millers Insurance Company, a Pennsylvania corporation (“PMIC,” and together with HoldCo, PMMHC and PMHC, the “Primary Parties”), hereby confirm, jointly and severally, their agreement (the “Agreement”) with Griffin Financial Group, LLC (the “Agent”), as follows:

     1. The Offering. On April 22, 2009, the Board of Directors of PMMHC adopted a Plan of Conversion (the “Plan”), which provides for the conversion of PMMHC from mutual to stock form (the “Conversion”), the formation of HoldCo as a holding company that will own 100% of the common stock of PMMHC, and the issuance of all of PMMHC’s outstanding common stock to HoldCo.

     In connection with the Conversion, HoldCo is offering up to 6,772,221 shares (the “Shares”) of common stock, par value $0.01 per share (the “Common Stock”), in (i) a subscription offering (the “Subscription Offering”), and, if necessary, (ii) a direct community offering (the “Community Offering”), and (iii) a syndicated community offering (the “Syndicated Community Offering”). The Subscription Offering, the Community Offering and the Syndicated Community Offering are herein sometimes collectively referred to as the “Offering.”

     HoldCo will issue the Shares at a purchase price of $10.00 per share (the “Purchase Price”). If the number of Shares is increased or decreased in accordance with the Plan, the term “Shares” shall mean such greater or lesser number, where applicable.

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     The shares of Common Stock to be offered in the Subscription Offering will be offered pursuant to nontransferable subscription rights in the following order of priority (subject to limitations set forth in the Plan):

• eligible members of PMMHC, who are the policyholders under individual policies of insurance issued by PMIC and in force on April 22, 2009 (“Eligible Members”);

• an employee stock ownership plan to be established as a tax-qualified plan of HoldCo; and

• directors, officers and employees of the Primary Parties as of the commencement of the Offering.

     HoldCo may offer shares of Common Stock for which subscriptions have not been received in the Subscription Offering in the Community Offering to the following categories of subscribers (listed in order of priority) before offering them to the general public:

• licensed insurance agencies and/or brokers that have been appointed by or otherwise are under contract with PMIC to market and distribute policies of insurance; and

• named insureds under policies of insurance issued by PMIC after April 22, 2009; and

• natural persons and trusts of natural persons residing in Lackawanna or Luzerne Counties, Pennsylvania.

     In the event a Community Offering is held, it may be held at any time during or immediately after the Subscription Offering. Depending on market conditions, shares not subscribed for in the Subscription Offering or in the Community Offering may be offered in the Syndicated Community Offering to selected members of the general public through a syndicate of registered broker-dealers who are members of the Financial Industry Regulatory Authority (“FINRA”). The Syndicated Community Offering will be co-managed by the Agent and Sterne, Agee & Leach, Inc. (“Sterne Agee”).

     It is acknowledged that the number of Shares to be sold in the Offering may be increased or decreased as described in the Prospectus (as hereinafter defined), that the purchase of Shares in the Offering is subject to maximum and minimum purchase limitations as described in the Prospectus, and that HoldCo may reject, in whole or in part, any subscription received in the Community Offering or Syndicated Community Offering.

     HoldCo has filed with the U.S. Securities and Exchange Commission (the “Commission”) a Registration Statement on Form S-1 (File No. 333-156936) in order to register the Shares under the Securities Act of 1933, as amended (the “1933 Act”), and the regulations promulgated thereunder (the “1933 Act Regulations”) and has filed such amendments thereto as have been required to the date hereof (the “Registration Statement”). The prospectus, as amended, included in the Registration Statement at the time it initially becomes effective is hereinafter called the “Prospectus,” except that if any prospectus is filed by HoldCo pursuant to Rule 424(b) or (c) of the regulations of the Commission under the 1933 Act differing from the

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prospectus included in the Registration Statement at the time it initially becomes effective, the term “Prospectus” shall refer to the prospectus filed pursuant to Rule 424(b) or (c) from and after the time said prospectus is filed with the Commission and shall include any supplements and amendments thereto from and after their dates of effectiveness or use, respectively.

     Concurrently with the execution of this Agreement, HoldCo is delivering to the Agent copies of the Prospectus, dated                     , 2009, of HoldCo to be used in the Subscription Offering and Community Offering (if any), and, if necessary, will deliver copies of the Prospectus and any prospectus supplement for use in a Syndicated Community Offering as defined in the Prospectus.

     2. Appointment of the Agent. Subject to the terms and conditions of this Agreement, the Primary Parties hereby appoint the Agent to consult with and to advise and assist the Primary Parties with respect to the sale of the Shares in the Offering.

     On the basis of the representations and warranties of the Primary Parties contained in, and subject to the terms and conditions of, this Agreement, the Agent accepts such appointment and agrees to consult with and advise the Primary Parties as to the matters set forth in the letter agreement, dated May 12, 2009, between the PMMHC and the Agent (“Letter Agreement”) (a copy of which is attached hereto as Exhibit A). It is acknowledged by the Primary Parties that the Agent shall not be obligated to purchase any Shares and shall not be obligated to take any action which is inconsistent with any applicable law, regulation, decision or order. Except as provided in the last Paragraph of this Section 2 and Section 13, the appointment of the Agent hereunder shall terminate upon consummation of the Offering.

     If selected broker-dealers are used to assist in the sale of Shares in the Syndicated Community Offering, the Primary Parties hereby, subject to the terms and conditions of this Agreement, appoint the Agent to co-manage with Sterne Agee such broker-dealers in the Syndicated Community Offering. On the basis of the representations and warranties of the Primary Parties contained in, and subject to the terms and conditions of, this Agreement, the Agent accepts such appointment and agrees to co-manage with Sterne Agee the selling group of broker-dealers in the Syndicated Community Offering.

     3. Refund of Purchase Price. In the event that the Offering is not consummated for any reason, including but not limited to the inability to sell a minimum of 4,505,000 Shares during the Offering (including any permitted extension thereof) or such other minimum number of Shares as shall be established consistent with the Plan, this Agreement shall terminate and any persons who have subscribed for any of the Shares shall have refunded to them the full amount that has been received from such person, without interest, as provided in the Prospectus.

     4. Fees. In addition to the expenses specified in Section 9 hereof, as compensation for the Agent’s services under this Agreement, the Agent has received or will receive the following fees from the Primary Parties:

(a) An advisory and marketing services fee in the amount of $100,000, paid as follows: (i) $50,000 was paid upon execution of the Letter Agreement, and (ii) $50,000 was paid upon the initial filing of the Registration Statement.

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(b)

A fee of 1.5% of the dollar amount of the Shares sold in the Subscription Offering and Community Offering less the $100,000 amount previously paid pursuant to Section 4(a) upon the successful completion of the Offering.

(c)

If any of the Shares remain unsubscribed after the Subscription Offering and Community Offering, at the request of the Primary Parties, the Agent and Sterne Agee will form a group of approved broker-dealer firms (the “Assisting Brokers”) in accordance with Section 2 hereof for purposes of the Syndicated Community Offering. The Primary Parties, in consultation with the Agent and Sterne Agee, will determine which FINRA member firms will participate in the Syndicated Community Offering and the extent of their participation. The fees payable by the Primary Parties pursuant to this Section 4(c) will not exceed 5.5% of the aggregate dollar amount of the Shares sold in the Syndicated Community Offering. Of such fee, the Agent will receive 0.75% and Sterne Agee will receive 4.75% of the aggregate dollar amount of the Shares sold pursuant to this Section 4(c) as a management fee, as set forth in the letter agreement, dated June 24, 2009, between PMMHC, the Agent and Sterne Agee (a copy of which is attached hereto as Exhibit B). The Agent and Sterne Agee will be responsible for compensating any Assisting Brokers in amounts relating to the number of Shares sold by such Assisting Brokers pursuant to this Section 4(c). All such fees payable under this Section 4(c) shall be in addition to all fees payable under Sections 4(a) and 4(b) and shall be paid at Closing (as defined in Section 5).

     The fees to be paid to Griffin, Sterne Agee, Stevens & Lee, which is serving as counsel to Griffin and the Primary Parties, and any other broker-dealers participating in the Offering collectively will not exceed an amount equal to six percent (6%) of the gross Offering proceeds. To the extent the total fees payable to Stevens & Lee, Griffin, Sterne Agee and other broker-dealers participating in the Offering would exceed an amount equal to six percent (6%) of the Offering proceeds, Stevens & Lee has agreed to reduce its fees by an amount such that the total amount paid by the Primary Parties will not exceed an amount equal to six percent (6%) of the Offering proceeds.

     In the event that HoldCo resolicits subscribers for Shares in the Subscription and Community Offering and the Agent is required to provide significant additional services in connection with such a resolicitation, the Primary Parties and the Agent shall mutually agree to the dollar amount of additional fees due to the Agent, if any. Until any agreement called for by this paragraph is reached, the Agent shall not accrue expenses relating to any resolicitation in an amount that would cause the total expenses incurred by the Agent to be greater than as set forth in Section 9 hereof without the prior written consent of the Primary Parties, which consent shall not be unreasonably withheld.

     If this Agreement is terminated in accordance with the provisions of Sections 3, 10, or 14, and the sale of Shares is not consummated, the Agent shall not be entitled to receive the fees set forth in Sections 4(b) and(c), and the Agent will return to the Primary Parties any amounts advanced to the Agent to the extent not actually incurred by the Agent in accordance with FINRA Rule 5110(f)(2)(C). Any amount paid pursuant to Section 4(a) above shall be applied to any fees due upon termination.

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     5. Closing. If the minimum number of Shares required to be sold in the Offering on the basis of the most recently updated evaluation of the pro forma market value of PMMHC, on a consolidated basis (the “Appraisal”) are subscribed for at or before the termination of the Offering, and the other conditions to the completion of the Offering are satisfied, HoldCo agrees to issue the Shares at the Closing Time (as hereinafter defined) against payment therefor by the means authorized by the Plan and to deliver certificates evidencing ownership of the Shares in such authorized denominations and registered in such names as may be indicated on the subscription order forms directly to the purchasers thereof as promptly as practicable after the Closing Time. The Closing (the “Closing”) shall be held at the offices of Stevens & Lee in King of Prussia, Pennsylvania, or at such other place as shall be agreed upon among the Primary Parties and the Agent, at 10:00 a.m., prevailing Eastern Time, on the business day selected by HoldCo or PMMHC, which business day shall be no less than two business days following the giving of prior notice by HoldCo or PMMHC to the Agent or at such other time as shall be agreed upon by HoldCo or PMMHC and the Agent. At the Closing, HoldCo shall deliver to the Agent by wire transfer in same-day funds the commissions, fees and expenses owing as set forth in Sections 4 and 9 hereof and the opinions and other documents required hereby shall be executed and delivered to effect the sale of the Shares as contemplated hereby and pursuant to the terms of the Prospectus; provided, however, that all out-of-pocket expenses to which the Agent is entitled under Section 9 hereof shall be due and payable upon receipt by HoldCo of a written accounting therefor setting forth in reasonable detail the expenses incurred by the Agent. The hour and date upon which HoldCo shall release the Shares for delivery in accordance with the terms hereof is referred to herein as the “Closing Time.”

     The Agent shall have no liability to any party for the records or other information provided by the Primary Parties (or their agents) to the Agent for use in allocating the Shares. Subject to the limitations of Section 11 hereof, the Primary Parties shall indemnify and hold harmless the Agent for any liability arising out of the allocation of the Shares in accordance with (i) the Plan generally, and (ii) the records or other information provided to the Agent by the Primary Parties (or their respective agents).

     6. Representations and Warranties of the Primary Parties. The Primary Parties jointly and severally represent and warrant to the Agent that, except as disclosed in the Prospectus:

(a) Each of the Primary Parties has and, as of the Closing Time, will have all such power, authority, authorizations, approvals and orders as may be required to enter into this Agreement, to carry out the provisions and conditions hereof and to issue and sell the Shares as provided herein and as described in the Prospectus. Subject to the receipt of regulatory approval, the execution, delivery and performance of this Agreement and the Letter Agreement and the consummation of the transactions herein contemplated have been duly and validly authorized by all necessary corporate action on the part of each of the Primary Parties. This Agreement has been validly executed and delivered by each of the Primary Parties, and is a valid, legal and binding obligation of each of the Primary Parties, enforceable in accordance with its terms, except as the legality, validity, binding nature and enforceability thereof may be limited by (i) bankruptcy, insolvency,

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	moratorium, conservatorship, receivership or other similar laws relating to or affecting the enforcement of creditors’ rights generally; (ii) general equity principles regardless of whether such enforceability is considered in a proceeding in equity or at law; and (iii) the extent, if any, that the provisions of Sections 11 or 12 hereof may be unenforceable as against public policy.
(b)	The Registration Statement was declared effective by the Commission on                     , 2009, and no stop order has been issued with respect thereto and no proceedings therefor have been initiated or, to the knowledge of the Primary Parties, threatened by the Commission. At the time the Registration Statement (including the Prospectus contained therein) became effective, the Registration Statement (including the Prospectus contained therein) complied as to form in all material respects with the 1933 Act and the regulations promulgated thereunder, and the Registration Statement (including the Prospectus contained therein) did not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. At the time any Rule 424(b) or (c) Prospectus was filed with the Commission and at the Closing Time referred to in Section 5, the Registration Statement, including the Prospectus contained therein (including any amendment or supplement thereto), and any state securities law application or any sales information authorized by the Primary Parties for use in connection with the Offering did not and will not contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading; provided, however, that the representations and warranties in this Section 6(b) shall not apply to statements or omissions made in reliance upon and in conformity with written information furnished to the Primary Parties by the Agent regarding the Agent or the method of conducting the Offering expressly for use in the Registration Statement or Prospectus or written statements or omissions from any sales information or information filed pursuant to state securities or blue sky laws or regulations.
(c)	At the time of filing the Registration Statement and at the date hereof, HoldCo was not, and is not, an ineligible issuer, as defined in Rule 405. At the time of the filing of the Registration Statement and at the time of the use of any issuer free writing prospectus, as defined in Rule 433(h), HoldCo met the conditions required by Rules 164 and 433 for the use of a free writing prospectus. If required to be filed, HoldCo has filed any issuer free writing prospectus related to the offered Shares at the time it is required to be filed under Rule 433 and, if not required to be filed, will retain such free writing prospectus in HoldCo’s records pursuant to Rule 433(g) and if any issuer free writing prospectus is used after the date hereof in connection with the offering of the Shares, HoldCo will file or retain such free writing prospectus as required by Rule 433.
(d)	As of the Applicable Time (as hereinafter defined), neither (i) the Issuer-Represented General Free Writing Prospectus(es) issued at or prior to the

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Applicable Time and the Statutory Prospectus, all considered together (collectively, the “General Disclosure Package”), nor (ii) any individual Issuer-Represented Limited-Use Free Writing Prospectus, when considered together with the General Disclosure Package, included any untrue statement of a material fact or omitted to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. The preceding sentence does not apply to statements in or omissions from any Prospectus included in the Registration Statement relating to the offered Shares or any Issuer-Represented Free Writing Prospectus based upon and in conformity with written information furnished to any of the Primary Parties by the Agent specifically for use therein. As used in this Paragraph and elsewhere in this Agreement:

(i)	“Applicable Time” means each and every date when a potential purchaser submitted a subscription or otherwise committed to purchase Shares.
(ii)	“Statutory Prospectus” as of any time, means the Prospectus relating to the offered Shares that is included in the Registration Statement relating to the offered Shares immediately prior to that time, including any document incorporated by reference therein.
(iii)	“Issuer-Represented Free Writing Prospectus” means any “issuer free writing prospectus,” as defined in Rule 433(h), relating to the offered Shares that is required to be filed with the Commission by HoldCo or required to be filed with the Commission. The term does not include any writing exempted from the definition of prospectus pursuant to clause (g) of Section 2(a)(10) of the 1933 Act, without regard to Rule 172 or Rule 173 under the 1933 Act Regulations.
(iv)	“Issuer-Represented General Free Writing Prospectus” means any Issuer-Represented Free Writing Prospectus that is intended for general distribution to prospective investors.
(v)	“Issuer-Represented Limited-Use Free Writing Prospectus” means any Issuer-Represented Free Writing Prospectus that is not an Issuer-Represented General Free Writing Prospectus. The term Issuer-Represented Limited-Use Free Writing Prospectus also includes any “bona fide electronic road show,” as defined in Rule 433 under the 1933 Act Regulations, that is made available without restriction pursuant to Rule 433(d)(8)(ii) under the 1933 Act Regulations or otherwise, even though not required to be filed with the Commission.

(e) Each Issuer-Represented Free Writing Prospectus, as of its date of first use and at all subsequent times through the completion of the Offering and sale of the offered Shares or until any earlier date that HoldCo notified or notifies the Agent (as described in the next sentence), did not, does not and will not include any information that conflicted, conflicts or will conflict with the information

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contained in the Registration Statement, including any document incorporated by reference therein that has not been superseded or modified. If at any time following the date of first use of an Issuer-Represented Free Writing Prospectus there occurred or occurs an event or development as a result of which such Issuer-Represented Free Writing Prospectus conflicted or would conflict with the information contained in the Registration Statement relating to the offered Shares or included or would include an untrue statement of a material fact or omitted or would omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances prevailing at that subsequent time, not misleading, HoldCo has notified or will notify promptly the Agent so that any use of such Issuer-Represented Free-Writing Prospectus may cease until it is amended or supplemented, and HoldCo has promptly amended or will promptly amend or supplement such Issuer-Represented Free Writing Prospectus to eliminate or correct such conflict, untrue statement or omission. The foregoing two sentences do not apply to statements in or omissions from any Issuer-Represented Free Writing Prospectus based upon and in conformity with written information furnished to any of the Primary Parties by the Agent specifically for use therein.

(f)	Pursuant to a 1998 Order from the Pennsylvania Insurance Commissioner (the “1998 Order”), PMMHC is required to obtain the approval of the Commissioner prior to effecting a conversion of PMMHC. PMMHC requested a letter from the Commissioner approving the conversion. At the date of such approval and at the Closing Time, the Plan will comply in all material respects with the 1998 Order.
(g)	HoldCo will promptly file the Prospectus and any supplemental sales literature with the Commission. The Prospectus and all supplemental sales literature, as of the date the Registration Statement became effective and at the Closing Time referred to in Section 5, will have received all required authorizations for use in final form.
(h)	Except for the 1998 Order, no order has been issued by the Department, the Commission, or any other state or federal regulatory authority, preventing or suspending the use of the Registration Statement, the Prospectus or any supplemental sales literature, and no action by or before any such government entity to revoke any approval, authorization or order of effectiveness related to the Offering is pending or, to the knowledge of the Primary Parties, threatened.
(i)	The Plan has been duly adopted by the Board of Directors of PMMHC. To the knowledge of the Primary Parties, no person has, or at the Closing Time will have, sought to obtain review of the final action of any state or federal regulatory authority with respect to the Plan or the Offering.
(j)	Curtis Financial Group LLC which prepared the valuation of PMMHC in connection with the Offering, has advised the Primary Parties in writing that it is independent with respect to each of the Primary Parties. The Primary Parties believe that Curtis Financial Group LLC is an expert in preparing appraisals of insurance companies.

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(k)	KPMG LLP, which certified the financial statements included in the Registration Statement, has advised the Primary Parties that it is an independent registered public accounting firm within the meaning of the Code of Ethics of the American Institute of Certified Public Accountants (the “AICPA”), that it is registered with the Public Company Accounting Oversight Board (“PCAOB”), and that it is, with respect to each of the Primary Parties, an independent certified public accountant within the meaning of, and is not in violation of the auditor independence requirements of the 1933 Act, the 1933 Act Regulations, the regulations of the PCAOB and the Sarbanes Oxley Act of 2002 (the “Sarbanes-Oxley Act”).
(l)	The consolidated financial statements and the notes thereto which are included in the Registration Statement and which are a part of the Prospectus present fairly the financial condition and retained earnings of PMMHC and its subsidiaries as of the dates indicated and the results of operations and cash flows for the periods specified. The financial statements comply in all material respects with the applicable accounting requirements of the 1933 Act Regulations, Regulation S-X of the Commission and accounting principles generally accepted in the United States of America (“GAAP”) applied on a consistent basis during the periods presented except as otherwise noted therein, and present fairly in all material respects the information required to be stated therein. The other financial, statistical and pro forma information and related notes included in the Prospectus present fairly the information shown therein on a basis consistent with the audited and unaudited financial statements included in the Prospectus, and as to the pro forma adjustments, the adjustments made therein have been properly applied on the basis described therein.
(m)	Since the respective dates as of which information is given in the Registration Statement, including the Prospectus, other than disclosed therein: (i) there has not been any material adverse change in the financial condition or in the earnings, capital, properties or business affairs of any of the Primary Parties or of the Primary Parties taken as a whole, whether or not arising in the ordinary course of business (“Material Adverse Effect”); (ii) there has not been any material change in total assets of the Primary Parties, nor have any of the Primary Parties issued any securities or incurred any liability or obligation for borrowings other than in the ordinary course of business; and (iii) there have not been any material transactions entered into by any of the Primary Parties, other than those in the ordinary course of business. The capitalization, liabilities, assets, properties and business of the Primary Parties conform in all material respects to the descriptions thereof contained in the Prospectus, and none of the Primary Parties has any material liabilities of any kind, contingent or otherwise, except as disclosed in Registration Statement or the Prospectus.
(n)	HoldCo is a corporation duly incorporated and validly existing under the laws of the Commonwealth of Pennsylvania, with corporate power and authority to own its properties and to conduct its business as described in the Prospectus, and will be qualified to transact business and in good standing in each jurisdiction in

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	which the conduct of business requires such qualification unless the failure to qualify in one or more of such jurisdictions would not have a Material Adverse Effect. As of the Closing Time, HoldCo will be in good standing under the laws of the Commonwealth of Pennsylvania and will have obtained all licenses, permits and other governmental authorizations required for the conduct of its business, except those that individually or in the aggregate would not have a Material Adverse Effect; and all such licenses, permits and governmental authorizations are in full force and effect, and HoldCo will be in compliance therewith in all material respects.
(o)	PMMHC is a corporation duly incorporated and validly existing under the laws of the Commonwealth of Pennsylvania in mutual form, with corporate power and authority to own its properties and to conduct its business as described in the Prospectus, and will be qualified to transact business and in good standing in each jurisdiction in which the conduct of business requires such qualification unless the failure to qualify in one or more of such jurisdictions would not have a Material Adverse Effect. As of the Closing Time, PMMHC will be in good standing under the laws of the Commonwealth of Pennsylvania and will have obtained all licenses, permits and other governmental authorizations required for the conduct of its business, except those that individually or in the aggregate would not have a Material Adverse Effect; and all such licenses, permits and governmental authorizations are in full force and effect, and PMMHC will be in compliance therewith in all material respects.
(p)	PMHC is a corporation duly incorporated and validly existing under the laws of the Commonwealth of Pennsylvania, with corporate power and authority to own its properties and to conduct its business as described in the Prospectus, and will be qualified to transact business and in good standing in each jurisdiction in which the conduct of business requires such qualification unless the failure to qualify in one or more of such jurisdictions would not have a Material Adverse Effect. As of the Closing Time, PMHC will be in good standing under the laws of the Commonwealth of Pennsylvania and will have obtained all licenses, permits and other governmental authorizations required for the conduct of its business, except those that individually or in the aggregate would not have a Material Adverse Effect; and all such licenses, permits and governmental authorizations are in full force and effect, and PMHC will be in compliance therewith in all material respects. All of the issued and outstanding shares of capital stock of PMHC are duly and validly issued and fully paid and nonassessable, and, as of the Closing Time, all capital stock of PMHC will be free and clear of any mortgage, pledge, lien, encumbrance, claim or restriction. PMHC does not own equity securities or any equity interest in any other business enterprise except as otherwise described in the Prospectus.
(q)	PMIC is a duly incorporated and validly existing Pennsylvania insurance company duly authorized to conduct its business as described in the Prospectus; the activities of PMIC as of the date hereof are and as of the Closing Time will be

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	permitted by the rules and regulations of the Department; PMIC has obtained all licenses, permits and other governmental authorizations currently required for the conduct of its business except those that individually or in the aggregate would not have a Material Adverse Effect; all such licenses, permits and other governmental authorizations are and, as of the Closing Time will be, in full force and effect and PMIC is and, as of the Closing Time will be, in good standing under the laws of the Commonwealth of Pennsylvania; all of the issued and outstanding capital stock of PMIC is duly and validly issued and fully paid and nonassessable; and as of the Closing Time, HoldCo will directly own all of such capital stock free and clear of any mortgage, pledge, lien, encumbrance, claim or restriction. PMIC does not own equity securities or any equity interest in any other business enterprise except as otherwise described in the Prospectus.
(r)	American Millers is a duly incorporated and validly existing Pennsylvania insurance company duly authorized to conduct its business as described in the Prospectus; the activities of American Millers as of the date hereof are and as of the Closing Time will be permitted by the rules and regulations of the Department; American Millers has obtained all licenses, permits and other governmental authorizations currently required for the conduct of its business except those that individually or in the aggregate would not have a Material Adverse Effect; all such licenses, permits and other governmental authorizations are and, as of the Closing Time will be, in full force and effect and American Millers is and, as of the Closing Time will be, in good standing under the laws of the Commonwealth of Pennsylvania; all of the issued and outstanding capital stock of American Millers is duly and validly issued and fully paid and nonassessable; and as of the Closing Time, PMIC will directly own all of such capital stock free and clear of any mortgage, pledge, lien, encumbrance, claim or restriction. American Millers does not own equity securities or any equity interest in any other business enterprise except as otherwise described in the Prospectus.
(s)	The authorized capital stock of HoldCo consists of 10,000,000 shares of Common Stock, par value $0.01 per share, and 1,000,000 shares of preferred stock, with a par value, if any, to be fixed by the board of directors. Upon consummation of the Offering, the issued and outstanding Common Stock of HoldCo will be within the range set forth in the Prospectus under the caption “Capitalization” (except for subsequent issuances, if any, pursuant to reservations, agreements or employee benefit plans referred to in the Prospectus); and the shares of Common Stock to be subscribed for in the Offering have been duly and validly authorized for issuance and, when issued and delivered by HoldCo pursuant to the Plan against payment of the consideration calculated as set forth in the Plan and the Prospectus, will be duly and validly issued and fully paid and nonassessable; the issuance of the Shares are not subject to preemptive rights, except for the Subscription Rights granted pursuant to the Plan; and the terms and provisions of the shares of Common Stock will conform in all material respects to the description thereof contained in the Prospectus. Upon issuance of the Shares, good title to the Shares

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	will be transferred from HoldCo to the purchasers of Shares against payment therefor in the Offering as set forth in the Plan and the Prospectus.
(t)	Upon consummation of the Conversion, the authorized capital stock of PMMHC will be 1,000,000 shares of common stock, par value $0.01 per share (the “PMMHC Common Stock”), and no shares of PMMHC Common Stock have been or will be issued prior to the Closing Time. The shares of PMMHC Common Stock to be issued to HoldCo will have been duly authorized for issuance and, when issued and delivered by PMMHC, will be duly and validly issued and fully paid and nonassessable, and all such PMMHC Common Stock will be owned beneficially and of record by HoldCo and free and clear of any security interest, mortgage, pledge, lien, encumbrance or legal or equitable claim; the certificates representing the shares of PMMHC Common Stock will conform with the requirements of applicable laws and regulations.
(u)	None of the Primary Parties is and, as of the Closing Time, none of the Primary Parties will be, in violation of their respective articles of incorporation or their respective bylaws, or in material default in the performance or observance of any obligation, agreement, covenant, or condition contained in any contract, lease, loan agreement, indenture or other instrument to which they are a party or by which they, or any of their respective property, may be bound which would result in a Material Adverse Effect. The consummation of the transactions herein contemplated will not (i) conflict with or constitute a breach of, or default under, the articles of incorporation or bylaws of any of the Primary Parties, or materially conflict with or constitute a material breach of, or default under, any material contract, lease or other instrument to which any of the Primary Parties is a party or bound, or any applicable law, rule, regulation or order that is material to the financial condition of the Primary Parties, on a consolidated basis; (ii) violate any authorization, approval, judgment, decree, order, statute, rule or regulation applicable to the Primary Parties except for such violations which would not have a Material Adverse Effect; or (iii) result in the creation of any material lien, charge or encumbrance upon any property of the Primary Parties.
(v)	No default exists, and no event has occurred which with notice or lapse of time, or both, would constitute a material default on the part of any of the Primary Parties, in the due performance and observance of any term, covenant or condition of any indenture, mortgage, deed of trust, note, bank loan or credit agreement or any other material instrument or agreement to which any of the Primary Parties is a party or by which any of them or any of their property is bound or affected in any respect which, in any such case, is material to the Primary Parties individually or considered as one enterprise, and such agreements are in full force and effect; and no other party to any such agreements has instituted or, to the knowledge of the Primary Parties, threatened any action or proceeding wherein any of the Primary Parties is alleged to be in default thereunder under circumstances where such action or proceeding, if determined adversely to any of the Primary Parties, would have a Material Adverse Effect.

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(w)	The Primary Parties have good and marketable title to all assets which are material to the businesses of the Primary Parties and to those assets described in the Prospectus as owned by them, free and clear of all material liens, charges, encumbrances, restrictions or other claims, except such as are described in the Prospectus or which do not have a Material Adverse Effect and all of the leases and subleases which are material to the businesses of the Primary Parties, as described in the Registration Statement or Prospectus, are in full force and effect.
(x)	The Primary Parties are not in material violation of any directive from the Department, the Commission, or any other agency to make any material change in the method of conducting their respective businesses; the Primary Parties have conducted and are conducting their respective businesses so as to comply in all respects with all applicable statutes and regulations (including, without limitation, regulations, decisions, directives and orders of the Department and the Commission), except where the failure to so comply would not reasonably be expected to result in any Material Adverse Effect, and there is no charge, investigation, action, suit or proceeding before or by any court, regulatory authority or governmental agency or body pending or, to the knowledge of any of the Primary Parties, threatened, which would reasonably be expected to materially and adversely affect the Offering, the performance of this Agreement, or the consummation of the transactions contemplated in the Plan as described in the Registration Statement, or which would reasonably be expected to result in a Material Adverse Effect.
(y)	The Primary Parties have received an opinion of their special counsel, Stevens & Lee, with respect to the federal income tax consequences of the Offering, as described in the Registration Statement and the Prospectus, and the facts and representations upon which such opinions are based are truthful, accurate and complete, and none of the Primary Parties will take any action inconsistent therewith. All material aspects of the aforesaid opinion are accurately summarized in the Prospectus.
(z)	The Primary Parties have timely filed all required federal and state tax returns, have paid all taxes that have become due and payable in respect of such returns, except where permitted to be extended, have made adequate reserves for similar future tax liabilities, and no deficiency has been asserted with respect thereto by any taxing authority.
(aa)	No approval, authorization, consent or other order of any regulatory or supervisory or other public authority is required for the execution and delivery by the Primary Parties of this Agreement and the issuance of the Shares, except (i) for the approval of the Pennsylvania Insurance Commissioner (which will have been received as of the Closing Time), (ii) the non-objection of FINRA, and (iii) any necessary qualification, notification, or registration or exemption under the securities or blue sky laws of the various states in which the Shares are to be offered for sale.

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(bb)	None of the Primary Parties has: (i) issued any securities within the last 18 months (except for notes to evidence bank loans or other liabilities in the ordinary course of business or as described in the Prospectus); (ii) had any dealings with respect to sales of securities within the 18 months prior to the date hereof with any member of FINRA, or any person related to or associated with such member, other than discussions and meetings relating to the Offering and purchases and sales of U.S. government and agency and other securities in the ordinary course of business; (iii) entered into a financial or management consulting agreement except for the Letter Agreement and as contemplated hereunder; or (iv) engaged any intermediary between the Agent and the Primary Parties in connection with the Offering, and no person is being compensated in any manner for such services.
(cc)	Neither the Primary Parties nor, to the knowledge of the Primary Parties, any employee of the Primary Parties, has made any payment of funds of the Primary Parties as a loan to any person for the purchase of Shares, except for HoldCo’s loan to its employee stock ownership plan (“ESOP”), the proceeds of which will be used by the ESOP to purchase Shares, or has made any other payment of funds prohibited by law, and no funds have been set aside to be used for any payment prohibited by law.
(dd)	PMMHC and its subsidiaries comply in all material respects with any applicable financial record keeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended, and the regulations and rules thereunder.
(ee)	The membership records of PMMHC, including, without limitation, as to Eligible Members, are accurate and complete in all material respects.
(ff)	The Primary Parties comply in all material respects with all laws, rules and regulations relating to environmental protection, and none of them has been notified or is otherwise aware that any of them is potentially liable, or is considered potentially liable, under the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, or any other federal, state or local environmental laws and regulations; no action, suit, regulatory investigation or other proceeding is pending, or to the knowledge of the Primary Parties, threatened against the Primary Parties relating to environmental protection, nor do the Primary Parties have any reason to believe any such proceedings may be brought against any of them; and no disposal, release or discharge of hazardous or toxic substances, pollutants or contaminants, including petroleum and gas products, as any of such terms may be defined under federal, state or local law, has occurred on, in, at or about any facilities or properties owned or leased by any of the Primary Parties.
(gg)	Each of the Primary Parties has fulfilled, in all material respects, its obligations, if any, under the minimum funding standards of Section 302 of the United States Employee Retirement Income Security Act of 1974, as amended (“ERISA”), and the regulations promulgated thereunder with respect to any “plan” (as defined in

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	Section 3(3) of ERISA and the regulations thereunder), which is maintained by any of the Primary Parties for their employees, and any such plan is in compliance in all material respects with the presently applicable provisions of ERISA and the regulations thereunder. None of the Primary Parties has incurred any unpaid liability under Title IV of ERISA to the Pension Benefit Guaranty Corporation (other than for the payment of premiums in the ordinary course) or to any such plan.
(hh)	HoldCo has applied for approval, subject to completion of the Offering, to have the Shares listed on the NASDAQ Global Market effective as of the Closing Time.
(ii)	Except as disclosed in the Prospectus, all material reinsurance treaties or agreements to which PMIC is a party or is a named reinsured are in full force and effect. Neither PMIC, nor, to the knowledge of the Primary Parties, any other party thereto, is in default under any such agreement, and no party may terminate any such agreement by reason of the transactions contemplated by the Plan.
(jj)	HoldCo has filed a registration statement on Form 8-A to register the Common Stock under Section 12(g) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and pursuant to Form 8-A such registration statement shall be effective concurrent with the effectiveness of the Registration Statement.
(kk)	There is no contract or other document of a character required to be described in the Registration Statement or the Prospectus or to be filed as an exhibit to the Registration Statement which is not described or filed as required.
(ll)	The Primary Parties maintain a system of internal accounting controls sufficient to provide reasonable assurances that (i) transactions are executed in accordance with management’s general or specific authorizations, (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles and to maintain accountability for assets, (iii) access to cash and other liquid assets is permitted only in accordance with management’s general or specific authorization, and (iv) the recorded ledger assets are compared with existing assets at reasonable intervals and appropriate action is taken with respect to any differences.
(mm)	Except as described in the Prospectus, (i) there are no contractual encumbrances or contractual restrictions or regulatory restrictions on the ability of the Primary Parties to pay dividends or make any other distributions on its capital stock, and (ii) there are no contractual encumbrances or contractual restrictions on the ability of the Primary Parties (A) to pay any indebtedness owed to the Primary Parties or (B) to make any loans or advances to, or investments in, the Primary Parties, or (C) to transfer any of its property or assets to the Primary Parties.
(nn)	None of the Primary Parties are required to be registered as an investment company under the Investment Company Act of 1940.

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(oo) The Primary Parties have taken all actions necessary to obtain at the Closing Time a blue sky memorandum from Stevens & Lee.

     Any certificates signed by an officer of any of the Primary Parties and delivered to the Agent or its counsel that refer to this Agreement shall be deemed to be a representation and warranty by the Primary Parties to the Agent as to the matters covered thereby with the same effect as if such representation and warranty were set forth herein.

     7. Representations and Warranties of the Agent. The Agent represents and warrants to the Primary Parties that:

(a)	The Agent is a limited liability company and is validly existing in good standing under the laws of the Commonwealth of Pennsylvania, with full power and authority to provide the services to be furnished to the Primary Parties hereunder.
(b)	The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby have been duly and validly authorized by all necessary action on the part of the Agent, and this Agreement and the Letter Agreement are the legal, valid and binding agreement of the Agent, enforceable in accordance with their terms except as the legality, validity, binding nature and enforceability thereof may be limited by (i) bankruptcy, insolvency, moratorium, conservatorship, receivership or other similar laws relating to or affecting the enforcement of creditors’ rights generally; (ii) general equity principles regardless of whether such enforceability is considered in a proceeding in equity or at law; and (iii) the extent, if any, that the provisions of Sections 11 or 12 hereof may be unenforceable as against public policy.
(c)	Each of the Agent and its employees, agents and representatives who shall perform any of the services hereunder has, and until the Offering is completed or terminated shall maintain, all licenses, approvals and permits necessary to perform such services.
(d)	No action, suit, charge or proceeding before the Commission, FINRA, any state securities commission or any court is pending, or to the knowledge of Agent threatened, against the Agent which, if determined adversely to Agent, would have a material adverse effect upon the ability of the Agent to perform its obligations under this Agreement.
(e)	The Agent is registered as a broker/dealer pursuant to Section 15(b) of the 1934 Act, as amended (the “1934 Act”) and is a member of FINRA.
(f)	Any funds received in the Offering by the Agent will be handled by the Agent in accordance with Rule 15c2-4 under the 1934 Act to the extent applicable.

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     8. Covenants of the Primary Parties. The Primary Parties hereby jointly and severally covenant with the Agent as follows:

(a)	HoldCo will not, at any time after the date the Registration Statement is declared effective, file any amendment or supplement to the Registration Statement without providing the Agent and its counsel an opportunity to review such amendment or supplement or, except as may be required by law, file any amendment or supplement to which amendment or supplement the Agent or its counsel shall reasonably object. HoldCo will furnish promptly to the Agent and its counsel copies of all correspondence from the Commission with respect to the Registration Statement and HoldCo’s responses thereto.
(b)	HoldCo represents and agrees that, unless it obtains the prior consent of the Agent, and the Agent represents and agrees that, unless it obtains the prior consent of HoldCo, it has not made and will not make any offer relating to the offered Shares that would constitute an “issuer free writing prospectus,” as defined in Rule 433, or that would constitute a “free writing prospectus,” as defined in Rule 405, required to be filed with the Commission. Any such free writing prospectus consented to by HoldCo and the Agent is hereinafter referred to as a “Permitted Free Writing Prospectus.” HoldCo represents that it has treated or agrees that it will treat each Permitted Free Writing Prospectus as an “issuer free writing prospectus,” as defined in Rule 433, and has complied and will comply with the requirements of Rule 433 applicable to any Permitted Free Writing Prospectus, including timely Commission filing where required, legending and record keeping. HoldCo need not treat any communication as a free writing prospectus if it is exempt from the definition of prospectus pursuant to Clause (a) of Section 2(a)(10) of the 1933 Act without regard to Rule 172 or 173.
(c)	The Primary Parties will use commercially reasonable efforts to cause any post-effective amendment to the Registration Statement to be declared effective by the Commission and will immediately upon receipt of any information concerning the events listed below notify the Agent (i) when the Registration Statement, as amended, has become effective; (ii) of any request by the Commission or any other governmental entity for any amendment or supplement to the Registration Statement, or of any request for additional information; (iii) of the issuance by the Commission or any other governmental agency of any order or other action suspending the Offering or the use of the Registration Statement or the Prospectus or any other filing of the Primary Parties under the 1933 Act, the 1933 Act Regulations, the 1934 Act, the 1934 Act Regulations or other applicable law, or the threat of any such action; or (iv) of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or of the initiation or threat of initiation or threat of any proceedings for that purpose.
(d)	The Primary Parties will comply in all material respects with any and all terms, conditions, requirements and provisions with respect to the Offering and the transactions contemplated thereby imposed by the Commission, by applicable

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	state law and regulations, and by the 1933 Act, the 1933 Act Regulations, the 1934 Act, and the rules and regulations of the Commission promulgated under the 1934 Act (the “1934 Act Regulations”), FINRA, and the NASDAQ Global Market, to be complied with prior to or subsequent to the Closing Time; and when the Prospectus is required to be delivered, the Primary Parties will comply in all material respects, at their own expense, with all material requirements imposed upon them by the Commission, by applicable state law and regulations and by the 1933 Act, the 1933 Act Regulations, the 1934 Act, and the 1934 Act Regulations, in each case as from time to time in force, so far as necessary to permit the continuance of sales or dealing in shares of Common Stock during such period in accordance with the provisions hereof and the Prospectus. If the updated valuation of the Company prepared by Curtis Financial Group, LLC following the Offering is not within the valuation range set forth in the Prospectus at the time of effectiveness and HoldCo decides to resolicit subscriptions, HoldCo will promptly prepare and file with the Commission a post-effective amendment to the Registration Statement relating to the results of the updated valuation prior to any resolicitation of subscriptions.
(e)	Each of the Primary Parties will inform the Agent of any event or circumstances of which it is or becomes aware as a result of which the Registration Statement and/or Prospectus, as then supplemented or amended, would include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein not misleading. If it is necessary, in the reasonable opinion of counsel for the Primary Parties, to amend or supplement the Registration Statement or the Prospectus in order to correct such untrue statement of a material fact or to make the statements therein not misleading in light of the circumstances existing at the time of their use, the Primary Parties will, at their expense, prepare and file with the Commission, as necessary under applicable federal and state rules and regulations, and furnish to the Agent, a reasonable number of copies of an amendment or amendments of, or a supplement or supplements to, the Registration Statement and the Prospectus (in form and substance reasonably satisfactory to counsel for the Agent after a reasonable time for review) which will amend or supplement the Registration Statement and/or the Prospectus so that as amended or supplemented it will not contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in light of the circumstances existing at the time, not misleading. For the purpose of this subsection, each of the Primary Parties will furnish such information with respect to itself as the Agent may from time to time reasonably request.
(f)	Pursuant to the terms of the Plan, HoldCo will endeavor in good faith, in cooperation with the Agent, to register or to qualify the Shares for offer and sale or to exempt such Shares from registration and to exempt HoldCo and its officers, directors and employees from registration as broker-dealers, under the applicable securities laws of the jurisdictions in which the Offering will be conducted; provided, however, that HoldCo shall not be obligated to file any general consent

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	to service of process or to qualify as a foreign corporation to do business in any jurisdiction in which it is not so qualified. In each jurisdiction where any of the Shares shall have been registered or qualified as above provided, HoldCo will make and file such statements and reports as are or may be required by the laws of such jurisdiction as a result of, or in connection with, such registration or qualification.
(g)	HoldCo will not sell or issue, contract to sell or otherwise dispose of, for a period of 180 days after the date hereof, without the Agent’s prior written consent, which consent shall not be unreasonably withheld, any shares of Common Stock other than in connection with any plan or arrangement described in the Prospectus.
(h)	For the period of three years from the date of this Agreement, HoldCo will furnish to the Agent upon request (i) a copy of each report of HoldCo furnished to or filed with the Commission under the 1934 Act or any national securities exchange or system or the NASDAQ Global Market on which any class of securities of HoldCo is listed or quoted, (ii) a copy of each report of HoldCo mailed to holders of Common Stock or non-confidential report filed with the Commission, the Department, or any other supervisory or regulatory authority or any national securities exchange or system or the NASDAQ Global Market on which any class of the securities of HoldCo is listed or quoted, (iii) each press release and material news item and article released by the Primary Parties, and (iv) from time-to-time, such other publicly available information concerning the Primary Parties as the Agent may reasonably request; provided that, any information or documents available on the Commission’s Electronic Data Gathering, Analysis and Retrieval System shall be considered furnished for purposes of this Section 8(h).
(i)	The Primary Parties will use the net proceeds from the sale of the Common Stock in the manner set forth in the Prospectus under the caption “USE OF PROCEEDS.”
(j)	HoldCo will distribute the Prospectus or other offering materials in connection with the offering and sale of the Common Stock only in accordance with the 1933 Act, the 1933 Act Regulations, the 1934 Act and the 1934 Act Regulations, and the laws of any state in which the shares are qualified for sale.
(k)	Prior to the Closing Time, HoldCo shall register its Common Stock under Section 12(b) of the 1934 Act, as amended, and will request that such registration statement be effective as of the Closing Time. HoldCo will use commercially reasonable efforts to list, subject to notice of issuance, the Shares on the NASDAQ Global Market.
(l)	For so long as the Common Stock is registered under the 1934 Act, HoldCo will furnish to its stockholders after the end of each fiscal year, in the time periods prescribed by applicable law and regulations, such reports and other information as are required to be furnished to its stockholders under the 1934 Act (including

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	consolidated financial statements of PMMHC and its subsidiaries, certified by independent public accountants).
(m)	HoldCo will report the use of proceeds of the Offering in accordance with Rule 463 under the 1933 Act.
(n)	The Primary Parties will maintain appropriate arrangements for depositing all funds received from persons mailing subscriptions for or orders to purchase Shares on a non-interest bearing basis as described in the Prospectus until the Closing Time and satisfaction of all conditions precedent to the release of HoldCo’s obligation to refund payments received from persons subscribing for or ordering Shares in the Offering, in accordance with the Plan as described in the Prospectus, or until refunds of such funds have been made to the persons entitled thereto or withdrawal authorizations canceled in accordance with the Plan and as described in the Prospectus. The Primary Parties will maintain, together with the Agent, such records of all funds received to permit the funds of each subscriber to be separately insured by the FDIC (to the maximum extent allowable) and to enable the Primary Parties to make the appropriate refunds of such funds in the event that such refunds are required to be made in accordance with the Plan and as described in the Prospectus.
(o)	The Primary Parties will take such actions and furnish such information as are reasonably requested by the Agent in order for the Agent to ensure compliance with Rule 2790 of FINRA.
(p)	The Primary Parties will conduct their businesses in compliance in all material respects with all applicable federal and state laws, rules, regulations, decisions, directives and orders including, all decisions, directives and orders of the Commission and the Department.
(q)	The Primary Parties shall comply with any and all terms, conditions, requirements and provisions with respect to the Plan and the transactions contemplated thereby imposed by the Commission, the 1933 Act, the 1933 Act Regulations, the 1934 Act and the 1934 Act Regulations to be complied with subsequent to the Closing Time. HoldCo will comply with all provisions of all undertakings contained in the Registration Statement.
(r)	The Primary Parties will not amend the Plan without notifying the Agent prior thereto.
(s)	HoldCo shall provide the Agent with any information necessary to assist with the allocation of the Shares in the Offering in the event of an oversubscription, and such information shall be accurate and reliable in all material respects.
(t)	HoldCo will not deliver the Shares until the Primary Parties have satisfied or caused to be satisfied each condition set forth in Section 10 hereof, unless such condition is waived in writing by the Agent.

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(u)	Immediately upon completion of the sale by HoldCo of the Shares contemplated by the Plan and the Prospectus, all of the issued and outstanding shares of capital stock of PMMHC shall be owned by HoldCo.
(v)	Prior to the Closing Time, the Plan shall have been approved by the eligible voting members of PMMHC in accordance with the provisions of PMMHC’s articles and bylaws.
(w)	On or before the Closing Time, the Primary Parties will have completed all conditions precedent to the Offering specified in the Plan and the offer and sale of the Shares will have been conducted in all material respects in accordance with the Plan and with all other applicable laws, regulations, decisions and orders, including all terms, conditions, requirements and provisions precedent to the Offering imposed upon any of the Primary Parties by the Department, the Commission or any other regulatory authority and in the manner described in the Prospectus.
(x)	HoldCo shall notify the Agent when funds shall have been received for the minimum number of Shares.

     9. Payment of Expenses. The Primary Parties will pay for all expenses incident to the performance of this Agreement, including without limitation: (a) the preparation, printing, filing, delivery and shipment of the Registration Statement, including the Prospectus, and all amendments and supplements thereto, and all filing fees related thereto; (b) all filing fees and expenses in connection with the qualification or registration of the Shares for offer and sale by HoldCo under the securities or “blue sky” laws, including without limitation filing fees, reasonable legal fees and disbursements of counsel in connection therewith, and in connection with the preparation of a blue sky law survey; (c) the filing fees of FINRA related to the Agent’s fairness filing under Rule 2710 (or any successor rule of FINRA); (e) fees and expenses related to the preparation of the Appraisal; (f) fees and expenses related to auditing and accounting services; (g) all expenses relating to advertising, postage, temporary personnel, investor meetings and the operation of the stock information center; (h) transfer agent fees and costs of preparation and distribution of stock certificates; and (i) fees and expenses of the Primary Parties relating to presentations or meetings undertaken in connection with the marketing of the Syndicated Community Offering and sale of the Shares in the Syndicated Community Offering to prospective investors and the Agent’s sales forces, including expenses associated with travel, lodging, and other expenses incurred by the officers of the Primary Parties; provided, however, that the Agent shall pay the fees and expenses of the Agent and any of its affiliates relating to presentations or meetings undertaken in connection with the marketing and sale of the Shares to prospective investors and the Agent’s sales forces, including expenses associated with the production of road show slides and graphics, fees and expenses of any consultants engaged in connection with the road show presentations, travel, lodging and other expenses incurred by the officers of the Agent and any such consultants. In the event that the Agent incurs any expenses on behalf of the Primary Parties, the Primary Parties will pay or reimburse the Agent for such expenses regardless of whether the Offering are successfully completed, and such reimbursements will not be included in the expense limitations set forth above. The Primary Parties also agree to reimburse the Agent for reasonable out-of-pocket expenses, including legal

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fees and expenses, in an amount up to $150,000 incurred by the Agent in connection with the services hereunder. In the Subscription and Community Offering, the Agent will not incur actual accountable reimbursable out-of-pocket expenses in excess of $5,000 without the consent of PMMHC or HoldCo. The Primary Parties and the Agent acknowledge, however, that expense caps may be increased by the mutual consent of PMMHC or HoldCo and the Agent, including in the event of a material delay in the Offering requiring more than two updates of the financial information contained in the Registration Statement, as amended or supplemented, to reflect a period later than that set forth in the original filing of the Registration Statement on January 26, 2009. Not later than two days prior to the Closing Time, the Agent will provide the Primary Parties with a detailed accounting of all reimbursable expenses to be paid at the Closing.

     10. Conditions to the Agent’s Obligations. The obligations of the Agent hereunder and the occurrence of the Closing are subject to the condition that all representations and warranties and other statements of the Primary Parties herein contained are, at and as of the commencement of the Offering and at and as of the Closing Time, true and correct in all material respects, the Primary Parties shall have performed all of their obligations hereunder to be performed on or before such dates, and to the following further conditions:

(a)

The Registration Statement shall have been declared effective by the Commission, and no stop order or other action suspending the effectiveness of the Registration Statement shall have been issued under the 1933 Act or proceedings therefor initiated or, to any of the Primary Parties’ knowledge, threatened by the Commission or any state authority and no order or other action suspending the authorization for use of the Prospectus or the consummation of the Reorganization shall have been issued or proceedings therefor initiated or, to any of the Primary Parties’ knowledge, threatened by the Department, the Commission, or any other governmental body.

(b)

At the Closing Time, the Agent shall have received:

               (1) The opinion, dated as of the Closing Time, of Morgan, Lewis & Bockius LLP, as special counsel to the independent directors of PMMHC, in form and substance satisfactory to counsel for the Agent, to the effect that:

(i)

HoldCo is a corporation duly incorporated and validly subsisting under the laws of the Commonwealth of Pennsylvania, with corporate power and authority to own its properties and to conduct its business as described in the Prospectus, and will be duly qualified to transact business and will be in good standing in each jurisdiction in which the conduct of its business requires such qualification and in which the failure to qualify would have a Material Adverse Effect.

(ii)

PMMHC is a duly incorporated and validly subsisting Pennsylvania mutual holding company with corporate power and authority to conduct its business as described in the Prospectus and to enter into this Agreement and perform its obligations hereunder, and is duly qualified to transact business and in good standing in each jurisdiction in which the conduct of

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	its business requires such qualification and in which the failure to qualify would have a Material Adverse Effect (as defined in Section 6(m)).
(iii)	PMHC is a duly incorporated and validly subsisting corporation under the laws of the Commonwealth of Pennsylvania, with corporate power and authority to own its properties and to conduct its business as described in the Prospectus and to enter into this Agreement and perform its obligations hereunder, and is duly qualified to transact business and in good standing in each jurisdiction in which the conduct of its business requires such qualification and in which the failure to qualify would have a Material Adverse Effect.
(iv)	PMIC is a property and casualty insurance company duly incorporated and validly subsisting under the laws of the Commonwealth of Pennsylvania with corporate power and authority to own its properties and to conduct its business as described in the Prospectus and to enter into this Agreement and perform its obligations hereunder, and is duly qualified to transact business and in good standing in each jurisdiction in which the conduct of its business requires such qualification and in which the failure to qualify would have a Material Adverse Effect. PMIC has the requisite corporate power and authority to enter into and perform its obligations under this Agreement and to carry on an insurance business pursuant to and to the extent of the certificates of authority issued under the laws of the Commonwealth of Pennsylvania and each other jurisdiction in which it is licensed to carry on an insurance business.
(v)	American Millers is a property and casualty insurance company duly incorporated and validly subsisting under the laws of the Commonwealth of Pennsylvania with corporate power and authority to own its properties and to conduct its business as described in the Prospectus and to enter into this Agreement and perform its obligations hereunder, and is duly qualified to transact business and in good standing in each jurisdiction in which the conduct of its business requires such qualification and in which the failure to qualify would have a Material Adverse Effect. American Millers has the requisite corporate power and authority to carry on an insurance business pursuant to and to the extent of the certificates of authority issued under the laws of the Commonwealth of Pennsylvania and each other jurisdiction in which it is licensed to carry on an insurance business.
(vi)	The authorized capital stock of HoldCo consists of 10,000,000 shares of Common Stock and 1,000,000 shares of preferred stock, having such par value, if any, as the board of directors shall fix and determine; HoldCo has no shares of capital stock issued and outstanding. Immediately upon consummation of the Offering, (a) the issued and outstanding capital stock of HoldCo will be within the range set forth in the Prospectus under the caption “Capitalization”; (b) the shares of Common Stock of HoldCo to be

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	subscribed for in the Offering will have been duly and validly authorized for issuance, and when issued and delivered by HoldCo pursuant to the Plan against payment of the consideration calculated as set forth in the Plan, will be fully paid and nonassessable; and (c) the issuance of the shares of Common Stock of HoldCo will not be subject to preemptive rights under the articles of incorporation or bylaws of HoldCo, or arising or outstanding by operation of law or, to the knowledge of such counsel, under any contract, indenture, agreement, instrument or other document, except for the subscription rights under the Plan and restrictions arising under the 1998 Order.
(vii)	The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby have been duly authorized by all necessary corporate action on the part of the Primary Parties; and this Agreement constitutes a valid, legal and binding obligation of each of the Primary Parties, enforceable in accordance with its terms, except to the extent that the provisions of Sections 11 and 12 hereof may be unenforceable as against public policy, and except to the extent that such enforceability may be limited by bankruptcy laws, insolvency laws, or other laws affecting the enforcement of creditors’ rights generally.
(viii)	The Plan has been duly adopted by the Board of Directors of PMMHC in the manner required by PMMHC’s articles of incorporation and bylaws.
(ix)	Upon consummation of the Offering, to the knowledge of such counsel, (a) the Offering was made in all material respects in accordance with the Plan, (b) all terms, conditions, requirements and provisions with respect to the Conversion and Offering imposed by the Commission, the Department, or any other Pennsylvania governmental agency, if any, were complied with by the Primary Parties in all material respects or appropriate waivers were obtained, and (c) all notice and waiting periods were satisfied or waived; provided, however, that no opinion need be expressed concerning the state securities or blue sky laws or foreign securities laws of various jurisdictions in which the Shares will be offered.
(x)	The Registration Statement has become effective under the 1933 Act and, to such counsel’s knowledge after making inquiry of the Commission, and based upon representations made by staff of the Commission, no stop order suspending the effectiveness of the Registration Statement has been issued, and, to such counsel’s knowledge, no proceedings for that purpose have been instituted or threatened.
(xi)	The description of the shares of Common Stock of HoldCo contained in the Registration Statement and the Prospectus, insofar as such statements purport to summarize certain provisions of the articles of incorporation and bylaws of HoldCo, provide a fair summary thereof, and the forms of certificates proposed to be used to evidence the shares of Common Stock

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	of HoldCo comply in all material respects with all applicable laws and regulations, including, without limitation, as to form.
(xii)	At the time that the Registration Statement became effective, the Registration Statement, including the Prospectus contained therein, as amended or supplemented (other than the financial statements, notes to financial statements, financial tables or other financial and statistical data included therein and the appraisal valuation and the business plan as to which counsel need express no opinion), complied as to form in all material respects with the requirements of the 1933 Act and the 1933 Act Regulations.
(xiii)	To such counsel’s knowledge, there are no legal or governmental proceedings pending or threatened (i) asserting the invalidity of this Agreement or (ii) seeking to prevent the offer, sale or issuance of the Shares.
(xiv)	The information in the Prospectus under the captions “BUSINESS — “ Regulation,” “RESTRICTIONS ON ACQUISITION OF THE HOLDING COMPANY,” and “DESCRIPTION OF CAPITAL STOCK,” to the extent that it constitutes summaries of legal matters, documents or proceedings, or legal conclusions, fairly presents in all material respects the information required to be presented in Form S-1.
(xv)	None of the Primary Parties are required to be registered as an investment company under the Investment Company Act of 1940, as amended.
(xvi)	To such counsel’s knowledge, none of the Primary Parties is in violation of its articles of incorporation or its bylaws as in effect at the Closing Time. In addition, to such counsel’s knowledge, the execution and delivery of and performance under this Agreement by the Primary Parties, the incurrence of the obligations set forth herein and the consummation of the transactions contemplated herein will not result in any material violation of the provisions of the articles of incorporation or the bylaws (or other constituent documents) of any of the Primary Parties or any material violation of any applicable law, act, regulation, or to such counsel’s knowledge, order or court order, writ, injunction or decree.

     In rendering such opinion, such counsel may rely as to matters of fact, without independent investigation, on certificates of responsible officers of the Primary Parties (to the extent relevant) and public officials, provided copies of any such certificates are delivered to Agent together with the opinion to be rendered hereunder. Such opinion may be limited to the laws of the Commonwealth of Pennsylvania and the federal securities laws of the United States of America, and such opinion will not be deemed to be rendering any opinion or any other statements regarding the regulatory laws of any other state.

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               (2) A letter of Morgan, Lewis & Bockius LLP addressed to the Agent to the effect that during the preparation of the Registration Statement and the Prospectus, representatives of Morgan, Lewis & Bockius LLP participated in conferences with certain officers of and other representatives of the Primary Parties, counsel to the Agent, representatives of the independent public accounting firm for the Primary Parties and representatives of the Agent at which the contents of the Registration Statement and the Prospectus and related matters were discussed, and although (without limiting the opinions provided pursuant to Section 10(b)(1)) Morgan, Lewis & Bockius LLP has not independently verified the accuracy, completeness or fairness of the statements contained in the Registration Statement and Prospectus, on the basis of the information obtained in the course of engagement as special counsel, nothing has come to the attention of the representatives of Morgan, Lewis & Bockius LLP providing services to the Company that caused them to believe that (i) the Registration Statement at the time it was ordered effective by the Commission, (ii) the General Disclosure Package as of the Closing Time, or (iii) the Prospectus, as of its date and as of the Closing Time, contained or contains any untrue statement of a material fact or omitted to state any material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading (it being understood that counsel need not assume any responsibility for the accuracy, completeness or fairness of the statements contained in the Registration Statement, the General Disclosure Package and the Prospectus, and counsel need not express any belief with respect to the financial statements, schedules and other financial and statistical data included, statistical or appraisal methodology employed, or information concerning internal controls over financial reporting contained in, the Registration Statement, Prospectus or General Disclosure Package).

               (3) The favorable opinion, dated as of the Closing Time, of counsel for the Agent, with respect to such matters as the Agent may reasonably require; such opinion may rely, as to matters of fact, upon certificates of officers and directors of the Primary Parties delivered pursuant hereto or as such counsel may reasonably request and upon the opinion of counsel to the Primary Parties or other counsel acceptable to the Agent.

               (4) A blue sky memorandum from Stevens & Lee addressed to the Primary Parties and the Agent relating to the Offering, including the Agent’s participation therein. The Blue Sky Memorandum will address the necessity of obtaining or confirming exemptions, qualifications or the registration of the Common Stock under applicable state securities law.

(c)	Concurrently with the execution of this Agreement, the Agent shall receive a letter from KPMG LLP, dated the date hereof and addressed to the Agent, in the form set forth in Exhibit C hereto.
(d)	At the Closing Time, the Agent shall receive a letter from KPMG LLP dated the Closing Time, addressed to the Agent, confirming the statements made by its letter delivered by it pursuant to subsection (c) above, the “specified date” referred to in clause (iii)(C) and (D) thereof to be a date specified in such letter, which shall not be more than six business days prior to the Closing Time.
(e)	At the Closing Time, the Shares shall have been approved for listing on the NASDAQ Global Market.

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(f)	At the Closing Time, counsel to the Agent shall have been furnished with such documents and opinions as counsel for the Agent may reasonably require for the purpose of enabling them to advise the Agent with respect to the issuance and sale of the Shares as herein contemplated and related proceedings, or in order to evidence the accuracy of any of the representations and warranties, or the fulfillment of any of the conditions herein contained.
(g)	At the Closing Time, the Agent shall receive a certificate of the Chief Executive Officer and Chief Financial Officer of each of the Primary Parties, dated as of the Closing Time, without personal liability to the effect that: (i) they have examined the Prospectus and at the time the Prospectus became authorized for final use, the Prospectus did not contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; (ii) there has not been, since the respective dates as of which information is given in the Prospectus, any Material Adverse Effect (as defined in Section 6(m)), whether or not arising in the ordinary course of business other than as disclosed in the Prospectus; (iii) the representations and warranties contained in Section 6 of this Agreement are true and correct with the same force and effect as though made at and as of the Closing Time; (iv) each of the Primary Parties has complied in all material respects with all material agreements and satisfied all conditions on its part to be performed or satisfied at or prior to the Closing Time including the conditions contained in this Section 10; (v) no stop order has been issued or, to their knowledge, is threatened, by the Commission or any other governmental body; and (vi) no order suspending the Offering, or the effectiveness of the Registration Statement has been issued and, to their knowledge, no proceedings for any such purpose have been initiated or threatened by the Department, the Commission, or any other federal or state authority.
(h)	At the Closing Time, the Agent shall receive a letter from Curtis Financial Group dated as of the Closing Time, stating that its opinion of the aggregate pro forma market value of PMMHC expressed in the Appraisal as most recently updated, remains in effect.
(i)	Prior to and at the Closing Time, none of the Primary Parties shall have sustained, since the date of the latest audited financial statements included in the Registration Statement and Prospectus, any material loss or interference with its business from fire, explosion, flood or other calamity, whether or not covered by insurance, or from any labor dispute or court or governmental action, order or decree, otherwise than as set forth in the Registration Statement and the Prospectus, and since the respective dates as of which information is given in the Registration Statement and the Prospectus, there shall not have been any material change, or any development involving a prospective Material Adverse Effect, otherwise than as set forth or contemplated in the Registration Statement and the Prospectus, the effect of which, in any such case described above, is in the Agent’s reasonable judgment sufficiently material and adverse as to make it

27

	impracticable or inadvisable to proceed with the Offering or the delivery of the Shares on the terms and in the manner contemplated in the Prospectus.
(j)	At or prior to the Closing Time, the Pennsylvania Insurance Commissioner shall have issued a letter or order to PMMHC, which shall have the force of (i) amending or rescinding the 1998 Order, (i) approving the Conversion and Offering, (ii) approving the establishment of an employee stock ownership plan and stock compensation plan, and (iv) approving the loan to the employee stock ownership plan to purchase Shares in the Offering.
(k)	Subsequent to the date hereof, there shall not have occurred any of the following: (i) a suspension or limitation in trading in securities generally on the New York Stock Exchange or American Stock Exchange or in the over-the-counter market, or quotations halted generally on the Nasdaq Stock Market, or minimum or maximum prices for trading have been fixed, or maximum ranges for prices for securities have been required by either of such exchanges or FINRA or by order of the Commission or any other governmental authority other than temporary trading halts (A) imposed as a result of intraday changes in the Dow Jones Industrial Average, (B) lasting no longer than until the regularly scheduled commencement of trading on the next succeeding business-day, and (C) which, when combined with all other such halts occurring during the previous five business days, total less than three; (ii) a general moratorium on the operations of federally-insured financial institutions or general moratorium on the withdrawal of deposits from federally-insured financial institutions declared by either federal or state authorities; or (iii) any outbreak of hostilities or escalation thereof or other calamity or crisis, including, without limitation, terrorist activities after the date hereof, the effect of any of (i) through (iii) herein, in the judgment of the Agent, is so material and adverse as to make it impracticable to market the Shares or to enforce contracts, including subscriptions or purchase orders, for the sale of the Shares.

     All such opinions, certificates, letters and documents will be in compliance with the provisions hereof only if they are reasonably satisfactory in form and substance to the Agent and to counsel for the Agent. Any certificate signed by an officer of PMMHC and delivered to the Agent or to counsel for the Agent shall be deemed a representation and warranty by PMMHC to the Agent as to the statements made therein. If any condition to the Agent’s obligations hereunder to be fulfilled prior to or at the Closing Time is not fulfilled, the Agent may terminate this Agreement (provided that if this Agreement is so terminated but the sale of Shares is nevertheless consummated, the Agent shall be entitled to the reimbursement of all expenses to the extent contemplated by Section 14 hereof but shall not be entitled to any compensation provided for in Section 4(b) or (c) hereof) or, if the Agent so elects, may waive any such conditions which have not been fulfilled or may extend the time of their fulfillment.

     11. Indemnification.

(a) The Primary Parties jointly and severally agree to indemnify and hold harmless the Agent, its officers, directors, agents, and employees and each person, if any,

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who controls the Agent within the meaning of Section 15 of the 1933 Act or Section 20(a) of the 1934 Act, against any and all loss, liability, claim, damage or expense whatsoever (including but not limited to settlement expenses, subject to the limitation set forth in the last sentence of Paragraph (c) below), joint or several, that the Agent or any of such officers, directors, agents, employees and controlling Persons (collectively, the “Related Persons”) may suffer or to which the Agent or the Related Persons may become subject under all applicable federal and state laws or otherwise, and to promptly reimburse the Agent and any Related Persons upon written demand for any reasonable expenses (including reasonable fees and disbursements of counsel) incurred by the Agent or any Related Persons in connection with investigating, preparing or defending any actions, proceedings or claims (whether commenced or threatened) to the extent such losses, claims, damages, liabilities or actions: (i) arise out of or are based upon any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement (or any amendment or supplement thereto), the Prospectus (or any amendment or supplement thereto), any Issuer-Represented Free Writing Prospectus or any blue sky application or other instrument or document of the Primary Parties or based upon written information supplied by any of the Primary Parties filed in any state or jurisdiction to register or qualify any or all of the Shares under the securities laws thereof (collectively, the “Blue Sky Applications”), or any application or other document, advertisement, or communication (“Sales Information”) prepared, made or executed by or on behalf of any of the Primary Parties with its consent or based upon written information furnished by or on behalf of any of the Primary Parties, whether or not filed in any jurisdiction in order to qualify or register the Shares under the securities laws thereof, (ii) arise out of or are based upon the omission or alleged omission to state in any of the foregoing documents or information, a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; (iii) arise from any theory of liability whatsoever relating to or arising from or based upon the Registration Statement (or any amendment or supplement thereto), the Prospectus (or any amendment or supplement thereto), any Issuer-Represented Free Writing Prospectus, or any Blue Sky Applications or sales information or other documentation distributed in connection with the Offering; or (iv) result from any claims made with respect to the accuracy, reliability and completeness of the records of policy holders, including without limitation, Eligible Members, or for any denial or reduction of a subscription or order to purchase Common Stock, whether as a result of a properly calculated allocation pursuant to the Plan or otherwise, based upon such records; provided, however, that no indemnification is required under this Paragraph (a) to the extent such losses, claims, damages, liabilities or actions arise out of or are based upon any untrue material statements or alleged untrue material statements in, or material omission or alleged material omission from, the Registration Statement (or any amendment or supplement thereto) or the Prospectus (or any amendment or supplement thereto), any Issuer-Represented Free Writing Prospectus, the Blue Sky Applications or Sales Information or other documentation distributed in connection with the Offering

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	made in reliance upon and in conformity with written information furnished to the Primary Parties by the Agent or its representatives (including counsel) with respect to the Agent expressly for use in any such document (or any amendment or supplement thereto); provided, further, that the Primary Parties will not be responsible for any loss, liability, claim, damage or expense to the extent that a court of competent jurisdiction finds that they result primarily from material oral misstatements by the Agent to a purchaser of Shares which are not based upon information in the Registration Statement or Prospectus, and the Agent agrees to repay to the Primary Parties any amounts advanced to it by the Primary Parties in connection with matters as to which it is found by a court of competent jurisdiction not to be entitled to indemnification hereunder.
(b)	The Agent agrees to indemnify and hold harmless the Primary Parties, their directors and officers, agents, and employees and each person, if any, who controls any of the Primary Parties within the meaning of Section 15 of the 1933 Act or Section 20(a) of the 1934 Act against any and all loss, liability, claim, damage or expense whatsoever (including but not limited to settlement expenses, subject to the limitation set forth in the last sentence of Paragraph (c) below), joint or several which they, or any of them, may suffer or to which they, or any of them, may become subject under all applicable federal and state laws or otherwise, and to promptly reimburse the Primary Parties and any such persons upon written demand for any reasonable expenses (including fees and disbursements of counsel) incurred by them in connection with investigating, preparing or defending any actions, proceedings or claims (whether commenced or threatened) to the extent such losses, claims, damages, liabilities or actions arise out of or are based upon any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement (or any amendment of supplement thereto), any Issuer-Represented Free Writing Prospectus, or any Blue Sky Applications or Sales Information or are based upon the omission or alleged omission to state in any of the foregoing documents a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, however, that the Agent’s obligations under this Section shall exist only if and only to the extent that such untrue statement or alleged untrue statement was made in, or such material fact or alleged material fact was omitted from, the Registration Statement (or any amendment or supplement thereto), the Prospectus (or any amendment or supplement thereto), the Blue Sky Applications or Sales Information in reliance upon and in conformity with written information furnished to any of the Primary Parties by the Agent or its representatives (including counsel) with respect to the Agent expressly for use therein.
(c)	Each indemnified party shall give prompt written notice to each indemnifying party of any action, proceeding, claim (whether commenced or threatened), or suit instituted against it in respect of which indemnity may be sought hereunder, but failure to so notify an indemnifying party shall not relieve it from any liability which it may have on account of this Section, Section 12 or otherwise, except to

30

the extent that such failure or delay causes actual harm to the indemnifying party with respect to such action, proceeding, claim or suit. An indemnifying party may participate at its own expense in the defense of such action. In addition, if it so elects within a reasonable time after receipt of such notice, an indemnifying party, jointly with any other indemnifying parties receiving such notice, may assume the defense of such action with counsel chosen by it reasonably acceptable to the indemnified parties that are defendants in such action, unless such indemnified parties reasonably object to such assumption on the ground that there may be legal defenses available to them that are different from or in addition to those available to such indemnifying party. If an indemnifying party assumes the defense of such action, the indemnifying parties shall not be liable for any fees and expenses of counsel for the indemnified parties incurred thereafter in connection with such action, proceeding or claim, other than reasonable costs of investigation. In no event shall the indemnifying parties be liable for the fees and expenses of more than one separate firm of attorneys (unless an indemnified party or parties shall have reasonably concluded that there may be defenses available to it or them which are different from or in addition to those of other indemnified parties) for all indemnified parties in connection with any one action, proceeding or claim or separate but similar or related actions, proceedings or claims in the same jurisdiction arising out of the same general allegations or circumstances. The indemnifying party shall be liable for any settlement of any claim against the indemnified party (or its directors, officers, employees, affiliates or controlling persons) made with the indemnifying party’s consent, which consent shall not be unreasonably withheld. The indemnifying party shall not, without the written consent of indemnified party, settle or compromise any claim against the indemnified party based upon circumstances giving rise to an indemnification claim against the indemnifying party hereunder unless such settlement or compromise provides that indemnified party and the other indemnified parties shall be unconditionally and irrevocably released from all liability in respect of such claim.

(d)

The agreements contained in this Section and in Section 12 hereof and the representations and warranties of the Primary Parties set forth in this Agreement shall remain operative and in full force and effect regardless of (i) any investigation made by or on behalf of the Agent or its officers, directors, controlling persons, agents or employees or by or on behalf of any of the Primary Parties or any officers, directors, controlling persons, agents or employees of any of the Primary Parties; (ii) delivery of and payment hereunder for the Shares; or (iii) any termination of this Agreement.

     12. Contribution.

(a) In order to provide for just and equitable contribution in circumstances in which the indemnification provided for in Section 11 is due in accordance with its terms but is found in a final judgment by a court to be unavailable from the Primary Parties or the Agent, the Primary Parties and the Agent shall contribute to the

31

aggregate losses, claims, damages and liabilities of the nature contemplated by such indemnification in such proportion so that (i) the Agent is responsible for that portion represented by the percentage that the fees paid to the Agent pursuant to Section 4 of this Agreement (not including expenses) (“Agent’s Fees”) bear to the total proceeds received by the Primary Parties from the sale of the Shares in the Offering, net of the Agent’s Fees, and (ii) the Primary Parties shall be responsible for the balance. If, however, the allocation provided above is not permitted by applicable law, then each indemnifying party shall contribute to such amount paid or payable by such indemnified party in such proportion as is appropriate to reflect not only such relative fault of the Primary Parties on the one hand and the Agent on the other in connection with the statements or omissions which resulted in such losses, claims, damages or liabilities (or actions, proceedings or claims in respect thereof), but also the relative benefits received by the Primary Parties on the one hand and the Agent on the other from the Offering, as well as any other relevant equitable considerations. The relative benefits received by the Primary Parties on the one hand and the Agent on the other hand shall be deemed to be in the same proportion as the total proceeds from the Offering, net of the Agent’s Fees, received by the Primary Parties bear to the Agent’s Fees. The relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Primary Parties on the one hand or the Agent on the other and the parties relative intent, good faith, knowledge, access to information and opportunity to correct or prevent such statement or omission. The Primary Parties and the Agent agree that it would not be just and equitable if contribution pursuant to this Section 12 were determined by pro-rata allocation or by any other method of allocation which does not take account of the equitable considerations referred to above in this Section 12. The amount paid or payable by an indemnified party as a result of the losses, claims, damages or liabilities (or action, proceedings or claims in respect thereof) referred to above in this Section 12 shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action, proceeding or claim. It is expressly agreed that the Agent shall not be liable for any loss, liability, claim, damage or expense or be required to contribute any amount which in the aggregate exceeds the amount paid (excluding reimbursable expenses) to the Agent under this Agreement. It is understood and agreed that the above-stated limitation on the Agent’s liability is essential to the Agent and that the Agent would not have entered into this Agreement if such limitation had not been agreed to by the parties to this Agreement. No person found guilty of any fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall be entitled to contribution from any person who was not found guilty of such fraudulent misrepresentation. For purposes of this Section 12, each of the Agent’s and the Primary Parties’ officers and directors and each person, if any, who controls the Agent or any of the Primary Parties within the meaning of the 1933 Act and the 1934 Act shall have the same rights to contribution as the Primary Parties and the Agent. Any party entitled to

32

contribution, promptly after receipt of notice of commencement of any action, suit, claim or proceeding against such party in respect of which a claim for contribution may be made against another party under this Section 12, will notify such party from whom contribution may be sought, but the omission to so notify such party shall not relieve the party from whom contribution may be sought from any other obligation it may have hereunder or otherwise than under this Section 12, except to the extent that such failure or delay causes actual harm to the indemnifying party with respect to such action, proceeding, claim or suit.

     13. Survival. All representations, warranties and indemnities and other statements contained in this Agreement or contained in certificates of officers of the Primary Parties or the Agent submitted pursuant hereto, shall remain operative and in full force and effect, regardless of any termination or cancellation of this Agreement or any investigation made by or on behalf of the Agent or its controlling persons, or by or on behalf of the Primary Parties and shall survive the issuance of the Shares, and any legal representative, successor or assign of the Agent, any of the Primary Parties, and any indemnified person shall be entitled to the benefit of the respective agreements, indemnities, warranties and representations.

     14. Termination. Agent may terminate this Agreement by giving the notice indicated below in this Section at any time after this Agreement becomes effective as follows:

(a)

In the event that (i) the Plan is abandoned or terminated by PMMHC or HoldCo, (ii) HoldCo fails to consummate the sale of the minimum number of the Shares by December 31, 2009, in accordance with the provisions of the Plan, or (iii) the Agent terminates this relationship because there has been a Material Adverse Effect, this Agreement shall terminate and no party to this Agreement shall have any obligation to the other hereunder, except that (i) the Primary Parties shall remain liable for any amounts due pursuant to Sections 3, 4, 9, 11 and 12 hereof, unless the transaction is not consummated due to the breach by the Agent of a warranty, representation or covenant and (ii) the Agent shall remain liable for any amount due pursuant to Sections 11 and 12 hereof, unless the transaction is not consummated due to the breach by the Primary Parties of a warranty representation or covenant.

(b)

If any of the conditions specified in Section 10 shall not have been fulfilled when and as required by this Agreement, or by the Closing Time, or waived in writing by the Agent, this Agreement and all of the Agent’s obligations hereunder may be canceled by the Agent by notifying PMMHC or HoldCo of such cancellation in writing at any time at or prior to the Closing Time, and any such cancellation shall be without liability of any party to any other party except that (i) the Primary Parties shall remain liable for any amounts due pursuant to Sections 3, 4, 9, 11 and 12 hereof, unless the transaction is not consummated due to breach by the Agent of a warrant, representation or covenant, and (ii) the Agent shall remain liable for any amount due pursuant to Sections 11 and 12 hereof, unless the transaction is not consummated due to the breach by the Primary Parties of a warranty representation or covenant.

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(c)	If Agent elects to terminate this Agreement as provided in this Section, PMMHC or HoldCo shall be notified by the Agent as provided in Section 15 hereof.
(d)	If this Agreement is terminated in accordance with the provisions of this Agreement, the Primary Parties shall pay the Agent the fees earned pursuant to Section 4 and will reimburse the Agent for its reasonable expenses pursuant to Section 9.

     15. Notices. All notices and other communications hereunder shall be in writing and shall be deemed to have been duly given if mailed by United States certified mail, return receipt requested, or sent by a nationally recognized commercial courier promising next business day delivery (such as Federal Express) or transmitted by any standard form of telecommunication (such as facsimile or email) with confirming copy sent by regular U.S. mail. Notices shall be sent as follows:

If to Agent:	Griffin Financial Group, LLC 620 Freedom Business Center, Suite 210 King of Prussia, Pennsylvania 19406 Attention:  Jeffrey P. Waldron, Senior Managing Director Facsimile:  610-371-7974 Email:  jpw@go2griffin.com
If to the Primary Parties:	Penn Millers Mutual Holding Company 72 North Franklin Street, P.O. Box P Wilkes-Barre, Pennsylvania 18773-0016 Attention:  Douglas A. Gaudet,                    President and Chief Executive Officer Facsimile:  570-829-4568 Email:  dgaudet@pennmillers.com
With a copy to:	Morgan, Lewis & Bockius LLP 1701 Market Street Philadelphia, Pennsylvania 19103 Attention:  David L. Harbaugh, Esquire Facsimile:  215-963-5001 Email:  dharbaugh@morganlewis.com

     Any party may change the address or other information for notices set forth above by written notice to the other parties, which notice shall be given in accordance with this Section 15.

     16. Parties. This Agreement shall inure to the benefit of and be binding upon the Agent and the Primary Parties and their respective successors. Nothing expressed or mentioned in this Agreement is intended or shall be construed to give any person, firm or corporation, other than the parties hereto and their respective successors and the controlling persons and officers, directors, agents and employees referred to in Sections 11 and 12 and their heirs and legal representatives, any legal or equitable right, remedy or claim under or in respect of this Agreement or any provisions herein contained. It is understood and agreed that this Agreement

34

is the exclusive agreement among the parties, supersedes any prior Agreement among the parties and may not be varied except by a writing signed by all parties, except for Section 11 of this Agreement, which may not be so amended.

     17. Partial Invalidity. In the event that any term, provision or covenant herein or the application thereof to any circumstances or situation shall be invalid or unenforceable, in whole or in part, the remainder hereof and the application of said term, provision or covenant to any other circumstance or situation shall not be affected thereby, and each term, provision or covenant herein shall be valid and enforceable to the full extent permitted by law.

     18. Construction. This Agreement shall be construed in accordance with the laws of the Commonwealth of Pennsylvania applicable to contracts executed and to be wholly performed therein without giving effects to its conflicts of laws principles or rules.

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     If the foregoing is in accordance with your understanding of our agreement, please sign and return to us a counterpart hereof, whereupon this instrument along with all counterparts will become a binding agreement between you and us in accordance with its terms.

Very truly yours, PENN MILLERS INSURANCE COMPANY
By:	/s/ Douglas A. Gaudet
	Douglas A. Gaudet, President and
	Chief Executive Officer
PMHC CORP.
By:	/s/ Douglas A. Gaudet
	Douglas A. Gaudet, President and
	Chief Executive Officer
PENN MILLERS HOLDING CORPORATION
By:	/s/ Douglas A. Gaudet
	Douglas A. Gaudet, President and
	Chief Executive Officer
PENN MILLERS MUTUAL HOLDING COMPANY
By:	/s/ Douglas A. Gaudet
	Douglas A. Gaudet, President and
	Chief Executive Officer

[COUNTERPART SIGNATURE OF GRIFFIN FINANCIAL ON FOLLOWING PAGE]

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     The foregoing Agency Agreement is hereby confirmed and accepted as of the date first set and above written.

GRIFFIN FINANCIAL GROUP, LLC
By:	/s/ Jeffrey P. Waldron
	Senior Managing Director

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EX-23.1

Exhibit 23.1

Consent of Independent Registered Public Accounting Firm

The Board of Directors
Penn Millers Mutual Holding Company:

We consent to the use of our report included herein and to the reference to our firm under the heading “Experts” in the prospectus.

Our report dated April 22, 2009, with respect to the consolidated balance sheets of Penn Millers Mutual Holding Company and subsidiary as of December 31, 2008 and 2007, and the related consolidated statements of operations, equity, and cash flows for each of the years in the three-year period ended December 31, 2008, contains an explanatory paragraph that describes Penn Millers Mutual Holding Company and subsidiary’s adoption of the provisions of Statement of Financial Accounting Standards No. 158, Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans, as of December 31, 2007, and Securities and Exchange Commission Staff Accounting Bulletin No. 108, Quantifying Financial Statement Misstatements, in 2008.

/s/ KPMG LLP

Philadelphia, Pennsylvania
September 9, 2009

EX-99.3

Exhibit 99.3

STOCK ORDER FORM Penn Millers Holding Corporation Stock Information Center 72 North Franklin Street PO Box 9800 Wilkes — Barre, PA 18773 Call us toll-free at 1-877-764-2743 For Internal Use Only BATCH #___ORDER #___CATEGORY ___ REC’D___O ___C ___ ORDER DEADLINE & DELIVERY: A Stock Order Form, properly completed and with full payment, must be received (not postmarked) by 12:00 noon, Eastern Time, on October 7, 2009. Subscription rights will become void after this time. Stock Order Forms can be delivered by using the enclosed Stock Order Return Envelope, or by hand or overnight delivery to the Stock Information Center address on this form. Stock Order Forms will only be accepted at this address. Faxes or copies of this form will not be accepted. PLEASE PRINT CLEARLY AND COMPLETE ALL APPLICABLE SHADED AREAS — READ THE ENCLOSED STOCK ORDER FORM INSTRUCTIONS (BLUE SHEET) AS YOU COMPLETE THIS FORM SUBSCRIPTION (1) NUMBER OF SHARES PRICE PER SHARE (2) TOTAL PAYMENT DUE X $10.00 = $ .00 Minimum Number of Shares: 25 ($250). Maximum Number of Shares : 304,750 ($3,047,500). See Stock Order Form instructions for more information regarding maximum number of shares. (3) METHOD OF PAYMENT — CHECK OR MONEY ORDER Enclosed is a personal check, bank check or money order made payable to: Christiana Bank & Trust Company, escrow agent in the amount of: Cash, wire transfers and third party checks will not be accepted for this purchase. Checks and money orders will be cashed upon receipt. (4) PURCHASER INFORMATION — SUBSCRIPTION OFFERING (descending order of priority) a. Check here if you were a Penn Millers Insurance Company policyholder as of April 22, 2009. (List policy information below.) b. Check here if you are a director, officer or employee of Penn Millers. Policy Title (Names on Policy) Policy Number(s) PLEASE NOTE: FAILURE TO LIST YOUR ELIGIBLE POLICIES, OR PROVIDING INCORRECT OR INCOMPLETE INFORMATION, COULD RESULT IN THE LOSS OF PART OR ALL OF YOUR SHARE ALLOCATION. ATTACH A SEPARATE PAGE IF ADDITIONAL SPACE IS NEEDED (5) PURCHASER INFORMATION — COMMUNITY OFFERING c. Natural persons and trusts of natural persons who are residents of Lackawanna or Luzerne Counties, Pennsylvania. d. Licensed insurance agencies that have been appointed by Penn Millers Insurance Company to market and distribute policies of insurance, and their affiliates. e. Named insureds under policies of insurance issued by Penn Millers Insurance Company after April 22, 2009. f. General Public. (6) MANAGEMENT AND EMPLOYEES (Check a box, if applicable) Check if you are a Penn Millers: Director Officer Employee Immediate family member, as defined in the Stock Order Form Instructions (7) MAXIMUM PURCHASER IDENTIFICATION Check here if you, individually or together with others (see Section 8), are subscribing for the maximum number of shares and are interested in purchasing more shares if the maximum purchase limitation is increased. See Section 1 of the Stock Order Form Instructions. (8) ASSOCIATES/AFFILIATES/ACTING IN CONCERT Check here if you, or any affiliates and associates or persons acting in concert with you, have submitted other orders for shares. If you check the box, list below all other orders submitted by you or your affiliates and associates or by persons acting in concert with you. Name(s) listed in Section 9 on other Stock Order Forms Number of shares ordered Name(s) listed in Section 9 on other Stock Order Forms Number of shares ordered (9) STOCK REGISTRATION The name(s) and address that you provide below will be reflected on your stock certificate, and will be used for communications related to this order. Please PRINT clearly and use full first and last name(s), not initials. You may not add the names of other persons who are not named insureds on your eligible policy. See Stock Order Form Instructions for further guidance. First Name, Middle Initial, Last Name Reporting SSN/Tax ID No. First Name, Middle Initial, Last Name SSN/Tax ID No. Street Daytime Phone Number (important) City (important) State Zip County (important) Evening Phone Number (important) (10) FORM OF STOCK OWNERSHIP Check the applicable box. See Stock Order Form Instructions for ownership definitions. Individual Joint Tenants Tenants in Common Uniform Transfer to Minors Act Corporation/Partnership Other ___(for reporting SSN, use minor’s) FOR BROKER USE ONLY (Community Offering Only) IRA SSN of Beneficial Owner: ___-___-___ (11) ACKNOWLEDGMENT AND SIGNATURE(S) I (we) understand that, to be effective, this form, properly completed, together with full payment, must be received by Penn Millers Holding Corporation no later than 12:00 noon Eastern Time, on October 7, 2009, otherwise this form and all of my (our) subscription rights in the Subscription Offering will be void. (continued on reverse side of this form) ORDER NOT VALID UNLESS SIGNED BY ALL PURCHASERS Signature (title, if applicable) Date Signature (title, if applicable) Date OVER

STOCK ORDER FORM — SIDE 2 (11) ACKNOWLEDGMENT AND SIGNATURES (continued from front of Stock Order Form) I/we certify that, if signing on behalf of a company registering common stock in Section 9, or otherwise signing in a fiduciary capacity, I/we am/are legally authorized to do so. I (we) agree that after receipt by Penn Millers Holding Corporation, this Stock Order Form may not be modified or canceled without Penn Millers Holding Corporation’s consent. Subscription rights pertain to those eligible to subscribe in the Subscription Offering. Pennsylvania law prohibits any person from transferring or entering into any agreement, directly or indirectly, to transfer the legal or Beneficial ownership of subscription rights, or the underlying securities to the account of another. Under penalty of perjury, I (we) certify that (1) the Social Security or Tax ID information and all other information provided hereon are true, correct and complete, (2) I am (we are) purchasing shares solely for my (our) own account and that there is no agreement or understanding regarding the sale or transfer of such shares, or the right to subscribe for shares, and (3) I (we) am not subject to backup withholding tax [cross out (3) if you have been notified by the IRS that you are subject to backup withholding.] I (WE) ACKNOWLEDGE THAT THE SHARES OF COMMON STOCK ARE NOT INSURED, AND ARE NOT GUARANTEED BY PENN MILLERS HOLDING CORPORATION OR BY THE FEDERAL OR STATE GOVERNMENT. I (we) further certify that, before purchasing the common stock of Penn Millers Holding Corporation, I (we) received the Prospectus dated September 9, 2009, which contains disclosures concerning, among other things, the nature of the security being offered and the risks involved in the investment. See the “Risk Factors” section beginning on page 12 of the Prospectus. By executing this form the investor is not waiving any rights under the Federal securities laws, including the Securities Act of 1933 and the Securities and Exchange Act of 1934. PENN MILLERS HOLDING CORPORATION STOCK ORDER FORM INSTRUCTIONS Sections (1) and (2) — Number of Shares and Total Payment Due. Indicate the Number of Shares that you wish to subscribe for and the Total Payment Due. Calculate the Total Payment Due by multiplying the number of shares by the $10.00 price per share. The minimum purchase is 25 shares ($250). The maximum allowable purchase for any person or entity, together with associates, affiliates or persons acting in concert with such person or entity, is 5% of the total number of shares issued in the offering. Please see the Prospectus section entitled “The Conversion — Limitations on Purchases of Common Stock,” beginning on Page 117 of the Prospectus. By signing this form, you are certifying that your order does not conflict with these purchase limitations. Section (3) — Payment by Check or Money Order. Payment must be made by including with this form a personal check, bank check or money order made payable to Christiana Bank & Trust Company, escrow agent. These will be cashed upon receipt; the funds remitted by personal check must be available within the account when your Stock Order Form is received. Indicate the amount remitted. Please do not remit cash, wire transfers or third party checks for this purchase. Section (4) — Purchaser Information (Subscription Offering). Please check the box that reflects the highest eligibility priority of the purchasers listed in Section 9 of the Stock Order Form. If you checked box (a) please list all names and policy numbers that the purchaser(s) had at April 22, 2009. Include all policies held individually or jointly. If purchasing shares for a minor, list only the minor’s eligible policies. If purchasing shares for a corporation or partnership, list only the entity’s eligible policies. Attach a separate page, if necessary. Box (b) refers to any director, officer or employee of Penn Millers Insurance Company or its affiliates who was not an Eligible Policyholder as of April 22, 2009. Failure to complete this section, or providing incorrect or incomplete information, could result in a loss of part or all of our share allocation in the event of an oversubscription. Orders placed in the Subscription Offering will take preference over orders placed in the Community Offering. See “The Conversion” section of the Prospectus for further details about the Subscription Offering and Community Offering, and the method for allocating shares in the event of an oversubscription. Section (5) Purchaser Information (Community Offering). If boxes (a) and (b) do not apply, please check one box (c), (d), (e) or (f), applicable to the purchaser(s) in Section 9. Orders placed in the Subscription Offering will take preference over orders placed in the Community Offering. See “The Conversion” section of the Prospectus for further details about the Subscription Offering and Community Offering, and the method for allocating shares in the event of an oversubscription. Section (6) — Management and Employees. Check the box if you are a director, officer or employee, of Penn Millers Insurance Company or its affiliates, or a member of their immediate family. Immediate family includes spouse, parents, siblings and children who reside in the same house as the directors , officers or employee. Section (7) — Maximum Purchaser Identification. Check the box, if applicable. If you check the box but have not subscribed for at least 304,750 shares and did not complete Section 8, you may not have an opportunity to purchase more shares. Section (8) — Associates/Affiliates/Acting in Concert. Check the box, if applicable, and provide the requested information. Attach a separate page, if necessary. Please see the Prospectus section entitled “The Conversion — Limitations on Purchases of Common Stock” for the defination of “associate,” “affiliate” and “acting in concert.” Section (9) — Stock Registration. Clearly PRINT the name(s) in which you want the shares registered and the mailing address for all correspondence related to your order, including a stock certificate. Each Stock Order Form will generate one stock certificate, subject to the stock allocation provisions described in the Prospectus. IMPORTANT: Subscription rights are non-transferable. If placing an order in the Subscription Offering, you may include the names of one or more named insureds on the eligible policy, but you may not add the names of persons who are not named insureds on your eligible policy. NOTE FOR FINRA MEMBERS (Formerly NASD): If you are a member of the Financial Industry Regulatory Authority (“FINRA”), formerly the National Association of Securities Dealers (“NASD”), or a person affiliated or associated with a FINRA member, you may have additional reporting requirements. Please report this subscription in writing to the applicable FINRA member within one day of payment thereof. Section (10) — Form of Stock Ownership. For reasons of clarity and standardization, the stock transfer industry has developed uniform stockholder registrations for issuance of stock certificates. Beneficiaries may not be named on stock registrations. If you have any questions on wills, estates, beneficiaries, etc., please consult your legal advisor. When registering stock, do not use two initials — use the full first name, middle initial and last name. Omit words that do not affect ownership such as “Dr.” or “Mrs.” Check the one box that applies. Buying Stock Individually — Used when shares are registered in the name of only one owner. To qualify in the Subscription Offering, the purchaser named in Section 9 of the Stock Order Form must have been a named insured on an eligible policy at Penn Millers Insurance Company on April 22, 2009, or be a director, officer or employee of Penn Millers Insurance Company or its affiliates. Buying Stock Jointly — To qualify in the Subscription Offering, the persons named in Section 9 of the Stock Order Form must have been a named insured on an eligible policy at Penn Millers Insurance Company on April 22, 2009, or be a director, officer or employee of Penn Millers Insurance Company or its affiliates. Joint Tenants — Joint Tenancy (with Right of Survivorship) may be specified to identify two or more owners where ownership is intended to pass automatically to the surviving tenant(s). All owners must agree to the sale of shares. Tenants in Common — May be specified to identify two or more owners where, upon the death of one co-tenant, ownership of the stock will be held by the surviving cotenant(s) and by the heirs of the deceased co-tenant. All owners must agree to the sale of shares. Buying Stock for a Minor — Shares may be held in the name of a custodian for a minor under the Uniform Transfer to Minors Act. To qualify in the Subscription Offering, the minor (not the custodian) named in Section 9 of the Stock Order Form must have been a named insured on an eligible policy at Penn Millers Insurance Company on April 22, 2009. The standard abbreviation for custodian is “CUST.” The Uniform Transfer to Minors Act is “UTMA.” Include the state abbreviation. For example, stock held by John Smith as custodian for Susan Smith under the PA Uniform Transfer to Minors Act, should be registered as John Smith CUST Susan Smith UTMA-PA (list only the minor’s social security number). Buying Stock for a Corporation/Partnership — On the first name line, indicate the name of the corporation or partnership and indicate that entity’s Tax ID Number for reporting purposes. To qualify in the Subscription Offering, the corporation or partnership named in Section 9 of the Stock Order Form must have been a named insured on an eligible policy at Penn Millers Insurance Company on April 22, 2009. Buying Stock in a Trust/Fiduciary Capacity — Indicate the name of the fiduciary and the capacity under which they are acting (for example, “Executor”), or name of the trust, the trustees and the date of the trust. Indicate the Tax ID Number to be used for reporting purposes. To qualify in the Subscription Offering, the entity named in Section 9 of the Stock Order Form must have had an eligible policy at Penn Millers Insurance Company on April 22, 2009. Buying Stock in a Self-Directed IRA (for trustee/broker use only) — The opportunity to purchase common stock through individual retirement accounts is allowable only in the Community Offering (see Section 5). Stock may be purchased using self-directed individual retirement accounts which have the ability to hold the securities, such as at a brokerage firm. The purchase of shares using such funds can only be made through a self-directed retirement account, not through retirement accounts which are not self-directed. Registration should reflect the custodian or trustee firm’s registration requirements. For example, on the first name line indicate the name of the brokerage firm, followed by CUST or TRUSTEE. On the second name line, indicate the name of the Beneficial owner (for example, “FBO JOHN SMITH IRA”). You can indicate an account number or other underlying information, and the custodian or trustee firm’s address and department to which all correspondence should be mailed related to this order, including a stock certificate. Indicate the Tax ID Number under which the IRA account should be reported for tax purposes. Section (11) — Acknowledgment and Signature(s). Sign and date the Stock Order Form where indicated. All persons listed in Section 9 of the Stock Order Form must sign the form. If signing on behalf of a company registering common stock in Section 9, or otherwise signing in a fiduciary capacity, you must be legally authorized to do so. Before you sign, please carefully review the information you provided and read the acknowledgment. Verify that you have printed clearly, and completed all applicable shaded areas on the Stock Order Form. Please review the Prospectus carefully before making an investment decision. Deliver your completed Stock Order Form, with full payment, so that it is received (not postmarked) by Penn Millers Holding Corporation by 12:00 noon, Eastern Time, on October 7, 2009. Stock Order Forms can be delivered by using the enclosed Yellow postage paid envelope marked “Stock Order Return”, or by hand or overnight delivery to the Stock Information Center address on the front of the Stock Order Form. Stock Order Forms will only be accepted at this address. We are not required to accept Stock Order Forms that are found to be deficient or incorrect, or that do not include proper payment or the required signature. OVERNIGHT DELIVERY can be made to the Stock Information Center address provided on the front of the Stock Order Form. QUESTIONS? Call our Stock Information Center, toll-free, at 1-877-764-2743 Monday through Friday from 10:00 a.m. to 4:00 p.m. Eastern Time. The Stock Information Center is not open on weekends or bank holidays. STOCK ORDER FORM — SIDE 2 See Front of Stock Order Form

EX-99.4

Questions

and

Answers

about

Our Conversion

and Stock Offering

TABLE OF CONTENTS

This pamphlet answers questions about the mutual-to-stock conversion of Penn Millers Mutual Holding Company and the related common stock offering of Penn Millers Holding Corporation.

ABOUT THE PLAN OF CONVERSION

The board of directors of Penn Millers Mutual Holding Company (“Penn Millers Mutual”) adopted a Plan of Conversion from Mutual to Stock Form on April 22, 2009 (the “Plan of Conversion”), whereby Penn Millers Mutual will convert from a mutual holding company to a stock holding company. In connection with the conversion, Penn Millers Holding Corporation, a corporation newly formed by Penn Millers Mutual, is conducting an initial public offering of up to 6,095,000 shares of common stock at a purchase price of $10.00 per share. Upon completion of the conversion and related stock offering, all of Penn Millers Mutual’s common stock will be acquired by Penn Millers Holding Corporation, which will become the parent holding company of Penn Millers Mutual, and Penn Millers Mutual will become the stock holding company of Penn Millers Insurance Company. Penn Millers Holding Corporation will be owned by persons who purchase shares of common stock in the offering.

The Plan of Conversion has been approved by the Pennsylvania Insurance Department, subject to approval of the Plan of Conversion by the eligible members of Penn Millers Mutual (as defined below). In order to complete the conversion, it is necessary for Penn Millers Mutual to receive the approval of at least a majority of all the eligible members of Penn Millers Mutual, so YOUR VOTE IS VERY IMPORTANT. Please return your proxy in the enclosed blue postage-paid envelope marked “PROXY RETURN.”

THE BOARD URGES ELIGIBLE MEMBERS TO VOTE “FOR” THE PLAN OF CONVERSION. PLEASE PROMPTLY VOTE, SIGN AND MAIL YOUR PROXY CARD(S).

MUTUAL TO STOCK CONVERSION

Q.	Why is Penn Millers Mutual converting from mutual to stock form?
A.	Penn Millers Mutual’s conversion from mutual to stock form and the related stock offering will provide the

	company with additional capital that will enable it to take advantage of anticipated future growth opportunities. The conversion will also provide an opportunity for the members of Penn Millers Mutual and the directors, officers and employees of the company to acquire stock in Penn Millers Holding Corporation, which will provide additional incentive for their performance and enable them to participate in Penn Millers’ success.
Q.	Will the conversion affect my coverage with Penn Millers Insurance Company?
A.	No. The insurance coverage under any Penn Millers Insurance Company policy that you own will not be affected by the conversion.
Q.	Will any policy that I hold with Penn Millers Insurance Company be converted to stock?
A.	No. All policies will remain as they were prior to the conversion. Eligible members of Penn Millers Mutual have a right to subscribe for shares of common stock during the subscription offering. Eligible members of Penn Millers Mutual consist of named insureds under issued and in force Penn Millers Insurance Company policies as of the close of business on April 22, 2009. These rights to purchase stock cannot be transferred.

ABOUT VOTING RIGHTS

Q.	Who is eligible to vote on the conversion?
A.	The members of Penn Millers Mutual of record as of July 10, 2009 (the “Record Date”) are eligible to vote on the conversion.
Q.	Am I required to vote?
A.	No. The Record Date members of Penn Millers Mutual are not required to vote. However, because the conversion will produce a fundamental change in Penn Millers’ corporate structure and the rights of the members of Penn Millers Mutual, the Board of Directors encourages all members to vote.
Q.	How can I vote?
A.	You may vote by mailing your signed proxy card(s) in the blue postage-paid envelope marked “PROXY RETURN.” Should you choose to attend the special meeting of members or you decide to change your vote, you may do so by revoking any previously signed proxy.

Q.	Why did I receive several proxy cards?
A.	Each named insured is only entitled to one vote as a member of Penn Millers Mutual. If you have more than one policy, you may have received more than one proxy card depending upon who is named as an insured on your policy. PLEASE VOTE, SIGN AND RETURN ALL PROXY CARDS THAT YOU RECEIVED.
Q.	Does my vote for the plan of conversion require me to buy common stock of Penn Millers Holding Corporation?
A.	No. Voting for the plan of conversion does not obligate you to buy shares of common stock of Penn Millers Holding Corporation.

ABOUT THE STOCK OFFERING AND PURCHASING SHARES

Investment in our common stock involves certain risks. For a discussion of certain of such risks and other factors, you are urged to read the accompanying Prospectus.

Q.	How many shares are being offered and at what price?
A.	In the stock offering, Penn Millers Holding Corporation is offering up to 6,095,000 shares of common stock for sale at $10.00 per share. All shares will be sold at the same price, and no sales commission will be charged to purchasers in the stock offering. Our employee stock ownership plan (“ESOP”) will purchase up to 9.99% of the total number of shares sold in the offering. The maximum number of shares sold may be increased to 6,772,221 to accommodate the ESOP purchase.
Q.	Who is eligible to purchase stock in the Offering?
A.	Pursuant to the Plan of Conversion, non-transferable rights to purchase shares of common stock at $10.00 per share in a subscription offering have been granted in the following order of priority:

Priority #1 –	Eligible members of Penn Millers Mutual, who consist of named insureds under an issued and in force Penn Millers Insurance Company policy as of the close of business on April 22, 2009.
Priority #2 –	Penn Millers’ employee stock ownership plan.
Priority #3 –	Directors, officers and employees of Penn Millers.

Common stock that is not sold in the subscription offering is expected to be offered to members of the public in a community offering at $10.00 per share. Unlike the subscription offering, there are no rights to purchase common stock in the community offering. We have the right to accept or reject any order received in the community offering. However, preference may be given to the following before orders are accepted from the general public:

•   licensed insurance agencies and brokers that have been appointed by or otherwise are under contract with Penn Millers Insurance Company to market and distribute policies of insurance.

•   named insureds under policies of insurance issued by Penn Millers Insurance Company after April 22, 2009.

•   natural persons and the trusts of natural persons residing in Lackawanna or Luzerne Counties, Pennsylvania.

	In the event that orders are received for more shares than are available for sale in the stock offering, shares will be allocated as described in the Prospectus.
	To the extent any shares remain available after orders have been received and accepted in the subscription offering and community offering, we may elect to offer such shares to the general public in a syndicated community offering using a syndicate of registered broker/dealers that will be co-managed by Griffin Financial Group and Sterne, Agee & Leach.
Q.	How can I buy shares during the Offering?
A.	Shares may be purchased by completing a Stock Order Form and returning it, with full payment, so that it is received (not postmarked) by 12:00 noon, Eastern Time, on October 7, 2009, unless the offering is extended as described in the Prospectus. Delivery of a Stock Order Form may be made in one of the following ways: (1) by mail, using the yellow Stock Order Return Envelope provided, (2) by overnight delivery to the Stock Information Center address noted on the Stock Order Form, or (3) by hand-delivery to the Stock Information Center.
Q.	How many shares of common stock can I purchase?
A.	The minimum purchase is 25 shares ($250). The maximum allowable purchase for any person or entity,

	together with associates, affiliates or persons acting in concert with such person or entity, is 304,750 shares ($3,047,500), which represents 5% of the shares of common stock to be sold in a maximum offering. If less than the maximum number of shares are sold in the offering, the maximum purchase limit will be reduced so that no one person, except for the ESOP, will own more than 5% of the common stock of Penn Millers Holding Corporation following the offering. Please review the section in the prospectus entitled “The Offering – Limitations on Purchases of Common Stock” for more information regarding purchase limitations.
Q.	How can I pay for the shares?
A.	Payment for shares can be remitted by personal check, bank check or money order in U.S. dollars, payable to “Christiana Bank & Trust Company, escrow agent.” These will be cashed upon receipt. Cash, wire transfers and third party checks will not be accepted.
Q.	What is the deadline for purchasing shares in the Subscription and Community Offerings?
A.	An executed Stock Order Form, with full payment, must be received by us, using an accepted method of delivery as described above, by no later than 12:00 noon, Eastern Time, on October 7, 2009, unless the offering is extended as described in the Prospectus.
Q.	Is it possible that I will not receive any or all of the shares I ordered?
A.	Yes. If we receive orders in the offering for more shares than we have available to sell, we will allocate shares as described in the Prospectus. If we are unable to fill your order, in whole or in part, you will receive a refund check.
Q.	Will payments for common stock earn interest?
A.	No. Payments that you submit will not earn interest.
Q.	May I change my mind after I place an order to subscribe for stock?
A.	No. After receipt, your order cannot be modified or withdrawn unless the offering is extended beyond November 23, 2009, or the offering range is amended to below 4,505,000 shares or above 6,095,000 shares.

Q.	I am eligible to subscribe for shares of common stock in the Subscription Offering but I am not interested in purchasing any shares. May I allow someone else to use my Stock Order Form to take advantage of my Subscription Offering priority?
A.	No. Subscription rights are non-transferable! To preserve subscription rights, the shares may only be registered in the name(s) of the eligible member(s) of Penn Millers Mutual. Subscribers may not add the names of persons who are not named insureds on their eligible policy. On occasion, people attempt to persuade eligible members to transfer subscription rights, or to purchase shares in the offering based on an understanding that the shares will be subsequently transferred to others. Participation in such schemes is against the law and may subject involved parties to prosecution. If you become aware of any such activities, we ask that you notify us promptly so that we can take the necessary steps to protect subscription rights.
Q.	Will my common stock be insured?
A.	No. Like all stock, the common stock cannot be insured or guaranteed by any government agency, nor will it be insured or guaranteed by Penn Millers Insurance Company or Penn Millers Holding Corporation.
Q.	Will dividends be paid on the stock?
A.	We currently do not intend to pay dividends to shareholders of Penn Millers Holding Corporation. Our dividend policy will depend upon our financial condition, results of operations and future prospects, as well as that of our lead insurance company, Penn Millers Insurance Company.
Q.	How will Penn Millers Holding Corporation shares trade?
A.	Penn Millers Holding Corporation has applied for the stock to be traded on the NASDAQ Global Market under the symbol “PMIC,” subject to completion of the offering. Once the shares begin trading, you may contact a firm offering investment services in order to buy or sell Penn Millers Holding Corporation shares. Upon completion of the offering, stock certificates will be mailed to purchasers in the stock offering. Shareholders may not be able to sell their shares of common stock until their stock certificate is delivered to them, even though the common stock will have begun trading.

Q.	Are officers and directors planning to purchase stock?
A.	Yes. Our executive officers and directors, together with their affiliates and associates, plan to purchase approximately 127,500 shares of common stock in the offering.

WHERE TO GET MORE INFORMATION

Q.	How can I get more information?
A.	A Stock Information Center has been established at our offices at 72 North Franklin Street, Wilkes-Barre, PA 18773. You may visit the Stock Information Center or call us, toll free, at 1 (877) 764-2743 from 10:00 a.m. to 4:00 p.m., Eastern Time, Monday through Friday. The Stock Information Center is not open on weekends or bank holidays.

This brochure is neither an offer to sell nor a solicitation of an offer to buy shares of common stock. The offer is made only by means of the Prospectus.

The shares of common stock are not insured and are not guaranteed by Penn Millers Holding Corporation, Penn Millers Insurance Company or by any Federal or state government or agency.

EX-99.5

September 8, 2009

Dear Potential Investor:

I am pleased to tell you about an investment opportunity. We are enclosing materials regarding the offering of shares of common stock of Penn Millers Holding Corporation in connection with the conversion of Penn Millers Mutual Holding Company from mutual to stock form. Upon completion of the conversion and offering, Penn Millers Holding Corporation will become the parent holding company of Penn Millers Mutual Holding Company, and Penn Millers Holding Corporation will be owned by the persons who purchase shares in the offering. No sales commission will be charged to purchasers in this stock offering. Included in this package are the following:

PROSPECTUS:  This document provides detailed information regarding the business operations of Penn Millers Insurance Company and the stock offering by Penn Millers Holding Corporation. Please read the Prospectus carefully, including the “Risk Factors” section, prior to making an investment decision.

QUESTIONS & ANSWERS BROCHURE:  This brochure answers commonly asked questions about the conversion and offering. We have also enclosed a list of investment considerations for potential investors to review before deciding to buy stock in the offering.

STOCK ORDER FORM:  Use this form to subscribe for common stock and mail it, along with full payment for the shares, to Penn Millers’ Stock Information Center in the enclosed yellow postage-paid envelope marked “Stock Order Return.” Your order must be physically received by the Stock Information Center no later than 12:00 noon, Eastern Time, on October 7, 2009.

Griffin Financial Group has been retained by Penn Millers as marketing agent in connection with the stock offering. If you have any questions after reading the enclosed materials, please call the Stock Information Center at (877) 764-2743, Monday through Friday, between the hours of 10:00 a.m. and 4:00 p.m., and ask for a Griffin Financial representative. The Stock Information Center is closed on weekends and bank holidays.

Sincerely,

Douglas A. Gaudet
President and Chief Executive Officer

This letter is neither an offer to sell nor a solicitation of an offer to buy shares of common stock. The offer is made only by the Prospectus. No stock order forms shall be submitted or accepted until such time that our registration statement is effective with the U.S. Securities and Exchange Commission.

The shares of common stock are not insured and are not guaranteed by Penn Millers Holding Corporation or any of its affiliates, or by any federal or state government or agency.

C

September 8, 2009

Dear Policyholder:

The Board of Directors of Penn Millers Mutual Holding Company (“Penn Millers Mutual”) has voted unanimously in favor of a plan to convert Penn Millers Mutual from a Pennsylvania mutual holding company to a Pennsylvania stock holding company. As part of this plan, we have formed Penn Millers Holding Corporation, which will be offering shares of its common stock in a stock offering and will become the parent holding company of Penn Millers Mutual. We are converting Penn Millers Mutual to stock form in order to raise additional capital that will enable Penn Millers Insurance Company to remain a viable, competitive and financially sound insurance company.

To accomplish the conversion, your participation is extremely important.  A special meeting of eligible members of Penn Millers Mutual is being held on October 15, 2009. The eligible members of Penn Millers Mutual consist of the policyholders of Penn Millers Insurance Company as of July 10, 2009. On behalf of the Board, I ask that you help us meet our goal by reading the enclosed material and then casting your vote in favor of the plan of conversion and mailing your signed proxy card immediately in the enclosed blue postage-paid envelope marked “PROXY RETURN.” Should you choose to attend the special meeting of the members and vote in person, you may do so by giving written notice of revocation to the Secretary of Penn Millers Mutual. If you have multiple insurance policies at Penn Millers Insurance Company, you may receive more than one mailing. If you do receive more than one proxy card, please vote, sign and return each one. If the plan of conversion is approved, let me assure you that:

•  Existing insurance coverage under your Penn Millers Insurance Company policy will not undergo any change as a result of the conversion.

•  Voting for approval of the plan will not obligate you to buy any shares of common stock in the stock offering.

As a policyholder of Penn Millers, you also have the opportunity to purchase shares of Penn Millers Holding Corporation in the stock offering being conducted in connection with the conversion. If you were a member of Penn Millers Mutual as of April 22, 2009, you have a nontransferable subscription right to purchase shares of Penn Millers Holding Corporation common stock on a first priority basis. The enclosed prospectus describes the stock offering and the business of Penn Millers. If you wish to purchase shares of common stock, please complete the stock order form and mail it, along with full payment for the shares to the Stock Information Center in the enclosed yellow postage-paid envelope marked Stock Order Return. Your order must be physically received by Stock Information Center no later than 12:00 noon, Eastern Time, on October 7, 2009. Please read the prospectus carefully before making an investment decision.

If you have any questions after reading the enclosed material, please call our Stock Information Center at (877) 764-2743, Monday through Friday, between the hours of 10:00 a.m. and 4:00 p.m.

Sincerely,

Douglas A. Gaudet
President and Chief Executive Officer

This letter is neither an offer to sell nor a solicitation of an offer to buy shares of common stock. The offer is made only by the Prospectus. No stock order forms shall be submitted or accepted until such time that our registration statement is effective with the U.S. Securities and Exchange Commission.

The shares of common stock are not insured and are not guaranteed by Penn Millers Holding Corporation or any of its affiliates, or by any federal or state government or agency.

A

September 8, 2009               

Dear Potential Investor:

At the request of Penn Millers Holding Corporation, we are enclosing materials regarding the offering of shares of common stock of Penn Millers Holding Corporation in connection with the conversion of Penn Millers Mutual Holding Company from mutual to stock form. Upon completion of the conversion and offering, Penn Millers Holding Corporation will become the parent holding company of Penn Millers Mutual Holding Company, and Penn Millers Holding Corporation will be owned by the persons who purchase shares in the offering. No sales commission will be charged to purchasers in this stock offering. Included in this package are the following:

PROSPECTUS:  This document provides detailed information regarding the business operations of Penn Millers Insurance Company and the stock offering by Penn Millers Holding Corporation. Please read the Prospectus carefully, including the “Risk Factors” section, prior to making an investment decision.

QUESTIONS & ANSWERS BROCHURE:  This brochure answers commonly asked questions about the conversion and offering. We have also enclosed a list of investment considerations for potential investors to review before deciding to buy stock in the offering.

STOCK ORDER FORM:  Use this form to subscribe for common stock and mail it, along with full payment for the shares, to Penn Millers’ Stock Information Center in the enclosed yellow postage-paid envelope marked “Stock Order Return.” Your order must be physically received by the Stock Information Center no later than 12:00 noon, Eastern Time, on October 7, 2009.

Griffin Financial Group has been retained by Penn Millers as marketing agent in connection with the stock offering. If you have any questions after reading the enclosed materials, please call the Stock Information Center at (877) 764-2743, Monday through Friday, between the hours of 10:00 a.m. and 4:00 p.m., and ask for a Griffin Financial representative. The Stock Information Center is closed on weekends and bank holidays.

Sincerely,

Griffin Financial Group, LLC

Jeffrey P. Waldron
Senior Managing Director

This letter is neither an offer to sell nor a solicitation of an offer to buy shares of common stock. The offer is made only by the Prospectus. No stock order forms shall be submitted or accepted until such time that our registration statement is effective with the U.S. Securities and Exchange Commission.

The shares of common stock are not insured and are not guaranteed by Penn Millers Holding Corporation or any of its affiliates, or by any federal or state government or agency.

D

September 8, 2009               

Dear Policyholder:

At the request of Penn Millers, we are enclosing materials regarding the conversion of Penn Millers Mutual Holding Company (“Penn Millers Mutual”) from mutual to stock form and the related stock offering of Penn Millers Holding Corporation. The Board of Directors of Penn Millers Mutual has voted unanimously in favor of a plan to convert Penn Millers Mutual from a Pennsylvania mutual holding company to a Pennsylvania stock holding company. As part of this plan, Penn Millers Mutual formed Penn Millers Holding Corporation, which will be offering shares of its common stock in a stock offering and will become the parent holding company of Penn Millers Mutual following its conversion. The purpose of the conversion and offering is to raise additional capital that will enable Penn Millers Insurance Company to remain a viable, competitive and financially sound insurance company.

To accomplish the conversion, your participation is extremely important.  A special meeting of eligible members of Penn Millers Mutual is being held on October 15, 2009. The eligible members of Penn Millers Mutual consist of the policyholders of Penn Millers Insurance Company as of July 10, 2009. On behalf of Penn Millers, I ask that you read the enclosed material and then cast your vote in favor of the plan of conversion and mail your signed proxy card immediately in the enclosed blue postage-paid envelope marked “PROXY RETURN.” Should you choose to attend the special meeting of the members and vote in person, you may do so by giving written notice of revocation to the Secretary of Penn Millers Mutual. If you have multiple insurance policies at Penn Millers Insurance Company, you may receive more than one mailing. If you do receive more than one proxy card, please vote, sign and return each one. If the plan of conversion is approved, let me assure you that:

•  Existing insurance coverage under your Penn Millers Insurance Company policy will not undergo any change as a result of the conversion.

•  Voting for approval of the plan will not obligate you to buy any shares of common stock in the stock offering.

As a policyholder of Penn Millers, you also have the opportunity to purchase shares of Penn Millers Holding Corporation in the stock offering being conducted in connection with the conversion. If you were a member of Penn Millers Mutual as of April 22, 2009, you have a nontransferable subscription right to purchase shares of Penn Millers Holding Corporation common stock on a first priority basis. The enclosed prospectus describes the stock offering and the business of Penn Millers. If you wish to purchase shares of common stock, please complete the stock order form and mail it, along with full payment for the shares to the Stock Information Center in the enclosed yellow postage-paid envelope marked Stock Order Return. Your order must be physically received by Stock Information Center no later than 12:00 noon, Eastern Time, on October 7, 2009. Please read the prospectus carefully before making an investment decision.

If you have any questions after reading the enclosed material, please call our Stock Information Center at (877) 764-2743, Monday through Friday, between the hours of 10:00 a.m. and 4:00 p.m.

Sincerely,

Griffin Financial Group, LLC

Jeffrey P. Waldron
Senior Managing Director

This letter is neither an offer to sell nor a solicitation of an offer to buy shares of common stock. The offer is made only by the Prospectus. No stock order forms shall be submitted or accepted until such time that our registration statement is effective with the U.S. Securities and Exchange Commission.

The shares of common stock are not insured and are not guaranteed by Penn Millers Holding Corporation or any of its affiliates, or by any federal or state government or agency.

B

Penn Millers Holding Corporation
Conversion and Stock Offering
Policyholder Considerations

If you were a policyholder of Penn Millers Insurance Company as of July 10, 2009, we are asking you to vote for our plan of mutual to stock conversion. We are also offering the opportunity for all policyholders to buy stock in the company.

The following are points to consider as you decide how to vote on the mutual to stock conversion of Penn Millers Mutual Holding Company and whether to purchase stock in the offering (along with references to the page numbers in the prospectus that you should read for a more complete description).

•  The conversion offering will provide enhanced protection to policyholders by:

•  Increasing capital; and

•  Enhancing claims paying ability (see pages 2-3, 7, 29, 32-39, and 81-82 of the prospectus).

WE URGE YOU TO VOTE FOR THE PLAN OF CONVERSION.

•  You are not required to purchase stock. But if you elect to do so, you have the first right to purchase stock in the offering if you were a policyholder as of April 22, 2009. This will permit you to own a share of the existing equity of the company (described throughout the prospectus). Even if you were not a policyholder as of April 22, 2009, you still have the right to purchase stock in the offering, you just do not have a first priority right.

•  The stock is being offered at a pro forma price-to-book value of between 50% and 62% (see pages 38 and 110-114 of the prospectus).

We have filed a Registration Statement on Form S-1 (including a prospectus) with the SEC (Commission File No. 333-156936) for the offering to which this document relates. Before you invest, you should read the prospectus in the registration statement and other documents we have filed with the SEC for more complete information about Penn Millers and this offering. If you have not already received a copy of these documents, you may get them for free by visiting EDGAR on the SEC web site at http://www.sec.gov. Alternatively, Penn Millers will arrange to send you a copy of the prospectus if you request it by calling the company toll-free at 1-877-764-2743.

F

Penn Millers Holding Corporation
Conversion and Stock Offering

Investment Considerations

for Potential Investors

The following are investment considerations for investors in our stock offering (along with references to the page numbers in our prospectus that you should read for a more complete description).

•  The stock is being offered at a pro forma price-to-book value of between 50% and 62% (see pages 38 and 110-114 of the prospectus)

•  We have a significant market position in the agribusiness insurance market, operating in 33 states. This is a specialized niche market with a limited number of competitors where we believe we have expertise and strong growth opportunities (see pages 1-3, 80-84, 85-87, and 98 of the prospectus).

•  We also operate in the general commercial insurance market in 8 states. We have developed a new product (PennEdge) that we introduced in 2009 to attract middle market commercial business. We believe this can be a differentiating product for us in a competitive market (see pages 1-3, 16, 80-82 and 84-86 of the prospectus).

•  The property and casualty insurance industry is cyclical, with periods of rising and falling premiums known as hard and soft markets. The industry has been experiencing soft market conditions. Although no assurance can be given, we believe that a hard market with rising premiums will return in the next twelve to twenty-four months. We have historically performed well in periods of significant premium increases (see pages 2-3, 15 and 81-82 of the prospectus).

We have filed a Registration Statement on Form S-1 (including a prospectus) with the SEC (Commission File No. 333-156936) for the offering to which this document relates. Before you invest, you should read the prospectus in the registration statement and other documents we have filed with the SEC for more complete information about Penn Millers and this offering. If you have not already received a copy of these documents, you may get them for free by visiting EDGAR on the SEC web site at http://www.sec.gov. Alternatively, Penn Millers will arrange to send you a copy of the prospectus if you request it by calling the company toll-free at 1-877-764-2743.

E

EX-99.7

PENN MILLERS MUTUAL HOLDING COMPANY
72 NORTH FRANKLIN STREET
WILKES-BARRE, PENNSYLVANIA 18773

NOTICE OF SPECIAL MEETING OF MEMBERS

Notice is hereby given that a Special Meeting of Members (the “Special Meeting”) of Penn Millers Mutual Holding Company (“Penn Millers Mutual” or the “Company”) will be held at Penn Millers Insurance Company, 72 North Franklin Street, Wilkes-Barre, Pennsylvania on October 15, 2009, at 2:00 p.m. The matters to be considered at the Special Meeting shall be:

(1) To consider and vote upon the Plan of Conversion from Mutual to Stock Organization (the “Plan”) providing for the conversion of Penn Millers Mutual from a Pennsylvania mutual holding company to a Pennsylvania stock holding company, and the related adoption of Amended and Restated Articles of Incorporation of the Company.

(2) To consider and vote upon any other matters that may lawfully come before the Special Meeting.

As of the date of mailing of this Notice of Special Meeting, the Board of Directors is not aware of any other matters that may come before the Special Meeting.

Under the Bylaws of Penn Millers Mutual, each named insured under a policy of insurance issued by Penn Millers Mutual that was in force at the close of business on July 10, 2009, is a member entitled to vote, except that each such member is entitled to only one vote at the Special Meeting.

BY THE ORDER OF THE BOARD OF DIRECTORS

Douglas A. Gaudet

President, Chief Executive Officer and Director

September 8, 2009

Wilkes-Barre, Pennsylvania

THE BOARD OF DIRECTORS URGES YOU TO CONSIDER CAREFULLY THIS PROXY MATERIAL. WHETHER OR NOT YOU PLAN TO BE PRESENT IN PERSON AT THE SPECIAL MEETING, PLEASE FILL IN, DATE, SIGN AND PROMPTLY RETURN THE ENCLOSED PROXY CARD USING THE ENCLOSED PROXY REPLY ENVELOPE. THIS WILL ASSURE THAT YOUR VOTE WILL BE COUNTED, BUT WILL NOT PREVENT YOU FROM VOTING IN PERSON IF YOU ATTEND THE SPECIAL MEETING. VOTING IN FAVOR OF THE PLAN WILL NOT OBLIGATE YOU TO PURCHASE COMMON STOCK IN THE OFFERING. IF YOU HAVE ANY QUESTIONS, PLEASE CONTACT US AT (877) 764-2743, MONDAY THROUGH FRIDAY BETWEEN THE HOURS OF 10:00 A.M. AND 4:00 P.M.

PENN MILLERS MUTUAL HOLDING COMPANY

PROXY STATEMENT

YOUR PROXY IS BEING SOLICITED BY THE BOARD OF DIRECTORS OF PENN MILLERS MUTUAL HOLDING COMPANY FOR USE AT A SPECIAL MEETING OF ITS MEMBERS TO BE HELD ON OCTOBER 15, 2009, AND ANY ADJOURNMENT OF THAT MEETING, FOR THE PURPOSES SET FORTH IN THE FOREGOING NOTICE OF SPECIAL MEETING.

THE BOARD OF DIRECTORS URGES YOU TO VOTE “FOR” THE PLAN OF CONVERSION FROM MUTUAL TO STOCK ORGANIZATION OF PENN MILLERS MUTUAL.

INTRODUCTION

Purpose of Meeting.  A Special Meeting of Members (the “Special Meeting”) of Penn Millers Mutual Holding Company (“Penn Millers Mutual” or the “Company”) will be held at Penn Millers Insurance Company, 72 North Franklin Street, Wilkes-Barre, Pennsylvania, on October 15, 2009, at 2:00 p.m., Eastern Time. The purpose of the Special Meeting is to consider and vote upon a Plan of Conversion from Mutual to Stock Organization, a copy of which is attached hereto as Exhibit A (the “Plan”), and the related Amended and Restated Articles of Incorporation, a copy of which is attached hereto as Exhibit B. The Plan was adopted by the Company’s Board of Directors and, if approved by a majority of members at the Special Meeting who are the named insureds under policies of insurance issued by Penn Millers Insurance Company that were in force at the close of business on July 10, 2009 (“the Voting Record Date”), will permit the Company to convert from a Pennsylvania mutual holding company to a Pennsylvania stock holding company (the “Conversion”) and become a wholly-owned subsidiary of Penn Millers Holding Corporation (the “Holding Company”) pursuant to the provisions of the Pennsylvania Business Corporation Law (the “Act”). The Holding Company is a Pennsylvania corporation formed by Penn Millers Mutual for the purpose of becoming its holding company upon the completion of the Conversion. In connection with the Conversion, the Holding Company will be conducting a common stock offering. See “The Offering of Holding Company Stock.” The Holding Company, Penn Millers Mutual and Penn Millers Insurance Company are collectively referred to herein as “Penn Millers.” All statements made in this Proxy Statement regarding the Plan are qualified in their entirety by reference to the Plan.

The Plan and the Amended and Restated Articles of Incorporation of Penn Millers Mutual are also available on Penn Millers’ website: www.pennmillers.com.

INFORMATION RELATING TO VOTING AT THE SPECIAL MEETING

In accordance with the Bylaws of the Company and the terms of the Plan, each named insured under an insurance policy issued by Penn Millers Insurance Company, its property and casualty insurance company subsidiary, that was in force at the close of business on the Voting Record Date is a member who is entitled to notice of and to vote at the Special Meeting (a “Record Date Member”). Each Record Date Member will be entitled at the Special Meeting to cast only one vote if such member of the Company is the named insured as of the Voting Record Date. Thus, a Record Date Member under more than one insurance policy in force as of the Voting Record Date will have only one vote. If there is more than one Record Date Member under an insurance policy in force as of the Voting Record Date, those Record Date Members will collectively have only one vote with respect to such insurance policy.

Twenty-five Record Date Members must be present, in person or by proxy, to constitute a quorum at the Special Meeting. Approval of the Plan will require the affirmative vote, either in person or by proxy, of at least a majority of the Record Date Members entitled to vote at the Special Meeting. As of the Voting Record Date, Penn Millers Insurance Company had 6,131 policies outstanding with respect to which the Record Date Members would be entitled to cast a total of 6,131 votes at the Special Meeting. Accordingly, 3,066 affirmative votes will be needed to approve the Plan and the related Amended and Restated Articles of Incorporation of the Company.

Record Date Members may vote at the Special Meeting or any adjournment thereof in person or by proxy. You may also vote by Internet or telephone, as outlined on the proxy card. If no contrary instructions are given,

signed proxies will be voted in favor of the Plan. If any other matters are properly presented before the Special Meeting, the proxies solicited hereby will be voted on such matters by the proxyholders according to their discretion. Any member giving a proxy will have the right to revoke the proxy at any time before it is voted by delivering written notice or a duly executed proxy bearing a later date to the Secretary of Penn Millers Mutual, or by attending the Special Meeting and voting in person.

In the event of more than one Record Date Member under an insurance policy, only one signature is required on the proxy. In the event that conflicting proxies are received from more than one Record Date Member with respect to the same policy or in the case of a tie, the proxyholders will vote in accordance with the instructions set forth in the latest proxy to be filed.

Penn Millers has engaged Georgeson Inc. as proxy solicitor to assist the Company in soliciting proxies for the Special Meeting. Penn Millers has also retained Griffin Financial Group, LLC (“Griffin Financial”) to act as a best efforts underwriter in connection with the offering related to this Conversion. These independent agents of Penn Millers frequently can be expected to be the initial contact with members and, as a result, may obtain proxies for or against the Plan. Penn Millers expects to reimburse these agents for their reasonable expenses. Proxies also may be solicited by officers, directors or other employees of Penn Millers, in person, by telephone or through other forms of communication. Such persons will be reimbursed by Penn Millers only for their expenses incurred in connection with this solicitation.

The proxies solicited hereby will be used only at the Special Meeting and at any adjournment thereof. They will not be used at any other meeting.

THE BOARD OF DIRECTORS OF PENN MILLERS MUTUAL HAS UNANIMOUSLY APPROVED THE PLAN OF CONVERSION AND RECOMMENDS THAT YOU VOTE “FOR” THE PROPOSAL. BECAUSE THE AFFIRMATIVE VOTE OF A MAJORITY OF RECORD DATE MEMBERS IS REQUIRED TO APPROVE THE PROPOSAL, THE FAILURE TO VOTE IS EQUIVALENT TO VOTING AGAINST THE PROPOSAL.

PENN MILLERS HOLDING CORPORATION

Penn Millers Holding Corporation was incorporated under the laws of the Commonwealth of Pennsylvania at the direction of the Board of Directors of Penn Millers Mutual for the purpose of serving as a holding company of Penn Millers Mutual upon the acquisition of all of the capital stock issued by Penn Millers Mutual in the Conversion. Prior to the Conversion, the Holding Company has not engaged, and will not engage, in any material operations. Upon completion of the Conversion, the Holding Company will have no significant assets other than the outstanding capital stock of Penn Millers Mutual and the net proceeds from the offering. The Holding Company’s principal business will be to hold the stock of Penn Millers Mutual after the Conversion. After the Conversion, the Holding Company will be subject to regulation by the Pennsylvania Insurance Department (the “Department”).

The Holding Company’s executive offices are located at 72 North Franklin Street, Wilkes-Barre, Pennsylvania, and its telephone number is (800) 233-8347.

PENN MILLERS MUTUAL HOLDING COMPANY

Penn Millers Mutual is a Pennsylvania-domiciled mutual holding company formed in 1999 when Penn Millers Insurance Company converted from mutual to stock form and reorganized in a mutual holding structure. Pursuant to the Department’s 1998 order approving the mutual holding company formation, each of the policyholders of Penn Millers Insurance Company became members of Penn Millers Mutual.

PENN MILLERS INSURANCE COMPANY

Penn Millers Insurance Company was originally formed as a mutual insurance company in 1887 and offers a wide array of property and casualty insurance products designed to meet the insurance needs of certain segments of the agricultural industry and small commercial businesses. Our agribusiness insurance product includes fire and

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allied lines, inland marine, general liability, commercial automobile, workers’ compensation and umbrella liability insurance. Our commercial product insurance product combines property, liability, business interruption, and crime coverage for small businesses; workers’ compensation; commercial automobile; and umbrella liability coverage. Penn Millers Insurance Company primarily markets its products through a network of over 450 independent producers in 33 states. Penn Millers Insurance Company has been assigned an “A−” (Excellent) rating by A.M. Best Company, Inc., which is the fourth highest out of fifteen ratings. The latest rating evaluation by A.M. Best Company, Inc. occurred on June 23, 2009.

Penn Millers Insurance Company and its affiliates are, and after the Conversion will continue to be, subject to examination and comprehensive regulation by the Department. The principal offices of Penn Millers Mutual and Penn Millers Insurance Company are located at 72 North Franklin Street, Wilkes-Barre, Pennsylvania 18773, and the telephone number for this office is (800) 233-8347.

DESCRIPTION OF THE PLAN OF CONVERSION

General

Effective as of April 22, 2009, Penn Millers Mutual adopted a Plan of Conversion to convert from a mutual to a stock form of organization. Pursuant to the Plan, Penn Millers Mutual will: (i) convert from a Pennsylvania-chartered mutual holding company to a Pennsylvania-chartered stock holding company, which will be accomplished by the amendment of its Articles of Incorporation to authorize the issuance of capital stock and to comply with the requirements of a Pennsylvania stock corporation, and (ii) issue all of its authorized capital stock to the Holding Company. The Holding Company will offer for sale between 4,505,000 and 6,095,000 shares of Holding Company common stock at a price of $10.00 per share (provided that, the maximum number of shares sold may be increased to 6,772,221 shares solely to accommodate the 9.99% interest being purchased by the employee stock ownership plan, as discussed in more detail below). This amount was determined based upon an independent valuation of the consolidated pro forma market value of Penn Millers Mutual as a subsidiary of the Holding Company. The valuation was performed by Curtis Financial Group, LLC (“Curtis Financial”).

The Conversion is contingent upon approval of the Plan by a majority of the Record Date Members of Penn Millers Mutual. The Pennsylvania Insurance Department approved the Plan on August 19, 2009. The Department’s approval of the Plan is not a recommendation or endorsement of the Plan or the related stock offering.

Background and Reasons for the Conversion

The Plan of Conversion was adopted by Penn Millers Mutual on April 22, 2009. The Company adopted the Plan of Conversion because it believes that growth is critical to Penn Millers’ success and the ability to grow requires additional capital. With additional capital Penn Millers will have greater strategic flexibility to achieve its operational goals.

Operationally, Penn Millers Insurance Company is primarily a commercial property and casualty insurer and it expects that its agribusiness and commercial business will remain its focus. Penn Millers Insurance Company will use the capital generated by the Conversion and related stock offering to strengthen this core competency. Specifically, Penn Millers Insurance Company goals are to:

•  Take advantage of growth opportunities when and if a hard market cycle market returns.  During a “hard market” cycle price competition is less severe in the property and casualty insurance industry and insurers are able to increase premiums, maintain underwriting discipline, and earn higher profit margins. During such hard market cycles, Penn Millers Insurance Company has historically experienced growth that exceeded industry norms. Therefore, we want to ensure it has sufficient capital to support the additional premium growth and other growth opportunities that it may experience in the next hard market cycle.

•  Attract and retain high-quality insurance producers.  Penn Millers Insurance Company’s policies are sold through select independent insurance producers. These producers significantly influence the insured’s decision to choose Penn Millers Insurance Company’s products over those of its competitors. Penn Millers Insurance Company will need capital to continue to differentiate its products and to attract producers by

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providing responsive and consistent communications and services from Penn Millers Insurance Company loss control, claim adjustment, and management representatives.

•  Continue to develop and market products for unique businesses and industries.  Penn Millers Insurance Company has been writing agribusiness policies for over 120 years. In 2009, we introduced our PennEdge product that will enable us to write customized coverages for mid-size commercial accounts. The PennEdge product is designed for unique business and industry segments, such as dry cleaners, manufacturing, hospitality, and printers. Penn Millers Insurance Company will need capital to continue to develop and market these niche products by growing its producer network and entering into select strategic alliances.

The Offering of Holding Company Common Stock

In connection with the Plan, the Holding Company is concurrently offering for sale up to 6,772,221 shares of Holding Company common stock at a price of $10.00 per share. The Holding Company common stock will be offered in three phases: a subscription offering phase, a community offering phase, and a syndicated community offering phase. Shares in the subscription offering phase (the “Subscription Offering”) will be offered in the following order of priority: first, to the eligible members of Penn Millers Mutual, who were the policyholders of Penn Millers Insurance Company as of April 22, 2009 (the “Eligible Members”), second, to the Holding Company’s employee stock ownership plan (the “ESOP”), and third, to the directors, officers and employees of Penn Millers. Subscription rights received in any of the foregoing categories will be subordinated to the subscription rights of those in a prior category, except that the ESOP shall have the right to purchase in the aggregate up to 9.99% of the number of shares of Holding Company common stock issued in the the total offering.

This Proxy Statement does not constitute an offer to sell shares of Holding Company common stock. Such offer shall be made only by means of the prospectus that accompanies this Proxy Statement. Please review the prospectus carefully before investing. The prospectus contains detailed information concerning the Subscription Offering, including:

•  a discussion of the risks of investing in shares of Holding Company common stock;

•  historical financial data for Penn Millers;

•  pro forma financial data for the Holding Company;

•  a discussion of Penn Millers’ business, financial condition and results of operations;

•  a review of certain tax consequences of the Conversion to Penn Millers Mutual and its members;

•  information concerning management and management compensation; and

•  a discussion of the Holding Company’s articles of incorporation and bylaws.

If Penn Millers Mutual receives subscriptions in the Subscription Offering for more than 6,095,000 shares, which is the maximum number being offered to Eligible Members and directors, officers and employees of Penn Millers Mutual, the subscription of such Eligible Members, directors, officers and employees of Penn Millers Mutual may be reduced. In that event, no shares will be sold in the Community Offering (as defined below), and the shares of common stock will be allocated first to Eligible Members and then to directors, officers and employees of Penn Millers Mutual. The maximum number of shares being offered will be increased to the extent necessary to allow the ESOP to purchase 9.99% of the shares issued in the Conversion.

If Eligible Members subscribe for more than 6,095,000 shares, no shares of common stock will be sold to directors, officers and employees of Penn Millers Mutual (except in his or her capacity as an Eligible Member). The shares of common stock will be allocated so as to permit each subscribing Eligible Members to purchase up to 1,000 shares (unless the magnitude of subscriptions does not permit such an allocation). Any remaining shares will be allocated among the Eligible Members who subscribe for more than 1,000 shares in proportion to the respective amounts of shares for which they subscribe.

To the extent that shares remain available after satisfaction of all subscriptions in the Subscription Offering, shares of Holding Company common stock may be offered to the general public in a community offering (the

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“Community Offering”). The Community Offering and the Subscription Offering will be conducted simultaneously and both offerings are scheduled to end on October 7, 2009.

In the Community Offering, the Holding Company, in its sole and absolute discretion, may give preference to subscriptions received from the following categories of subscribers before proceeding to accept subscriptions from the general public:

•  licensed insurance agencies that have been appointed by or otherwise are under contract with Penn Millers Mutual to market and distribute policies of insurance;

•  members under policies of insurance issued by Penn Millers Mutual after April 22, 2009; and

•  natural persons and trusts of natural persons (including individual retirement and Keogh retirement accounts and personal trusts in which such natural persons have substantial interests) who are residents of Lackawanna or Luzerne Counties, Pennsylvania.

Unlike the Subscription Offering, purchasers in the Community Offering do not have a priority right to purchase shares of Holding Company common stock, and their orders are subordinate to the rights of the eligible subscribers in the Subscription Offering. The minimum number of shares that may be purchased is 25 shares. The maximum allowable purchase for any person or entity, together with associates, affiliates or persons acting in concert, is 304,750 shares ($3,047,500), or 5% of the number of shares to be sold in a maximum offering.

The Subscription Offering and the Community Offering will be managed by Griffin Financial. Any shares of Holding Company common stock not purchased in the Subscription Offering and Community Offering may, in the absolute discretion of the Holding Company, be offered for sale to the general public through a syndicate of registered broker-dealers to be formed and co-managed by Griffin Financial and Sterne Agee & Leach, Inc. on the Holding Company’s behalf (the “Syndicated Community Offering”). The Subscription Offering, the Community Offering and the Syndicated Community Offering, if any, are hereinafter collectively referred to as the “Offerings.”

If the number of shares purchased in the Offerings are collectively less than 4,505,000, then Penn Millers will return all funds received in the Offerings promptly to purchasers, with any interest earned on such funds. In that event, Penn Millers Mutual may cause a new valuation of the pro forma market value of Penn Millers Mutual to be performed, and based on this valuation commence a new offering of the common stock. In that event, people who submitted subscriptions or orders will be permitted to submit new subscriptions or orders.

The Holding Company has never issued any capital stock to the public. Consequently, there is no established market for its common stock. The Holding Company has applied to have its stock listed on the Nasdaq Global Market, but an active trading market may not develop.

Valuation of the Company

The Plan requires that the aggregate purchase price of the shares of Holding Company common stock to be issued in the Conversion be based upon the appraised estimated consolidated pro forma market value of the common stock, as determined on the basis of an independent valuation. Curtis Financial, a firm experienced in valuations of insurance companies and other financial institutions, has made an independent appraisal of the estimated consolidated pro forma market value of Penn Millers Mutual (the “Valuation”) and has determined that, as of August 7, 2009, such estimated consolidated pro forma market value ranged from $45,050,000 to $60,950,000 (the “Estimated Valuation Range”). The Holding Company, in consultation with its advisors, has determined to offer the shares in the Conversion at a price of $10.00 per share (the “Purchase Price”). Accordingly, the Holding Company will offer between 4,505,000 and 6,095,000 shares of Holding Company common stock in the Offerings, except that the Holding Company may issue up to 6,772,221 shares if necessary to satisfy the ESOP’s subscription rights to purchase 9.99% of the shares issued in the Conversion.

The Valuation is not intended and must not be construed as a recommendation of any kind as to the advisability of purchasing shares or as any form of assurance that, after the Conversion, the shares can be resold at or above the Purchase Price. The Valuation considered a number of factors and was based upon estimates derived from those factors, all of which are subject to change from time to time. In preparing the Valuation, Curtis Financial relied upon and assumed the accuracy and completeness of financial and statistical

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information provided by Penn Millers Mutual. Curtis Financial did not verify the audited financial statements of Penn Millers Mutual as of and for the years ended December 31, 2008, 2007, 2006 and 2005, or independently value the assets of Penn Millers Mutual. The Valuation will be further updated immediately prior to the completion of the Conversion.

In the event that an updated valuation is provided by Curtis Financial that does not fall within the Estimated Valuation Range, and the Holding Company determines to proceed with the Offerings, the Holding Company will return the funds received to purchasers, without interest, and will resolicit those who have previously subscribed for shares in the Subscription Offering, Community Offering and Syndicated Community Offering. We will also resolicit purchasers in the event that the Offerings are extended beyond November 23, 2009.

Amendment of Articles of Incorporation

The Conversion will be accomplished by the filing of amended and restated articles of incorporation for Penn Millers Mutual. These amended and restated articles will, among other things, create and authorize the issuance of shares of capital stock of the converted company. After issuance of the shares of capital stock to the Holding Company, Penn Millers Mutual will become a wholly owned stock subsidiary of the Holding Company and will be re-named “PMMLTC Corp”.

Effect of the Conversion on Members

General.  Each member of Penn Millers Mutual is a policyholder of Penn Millers Insurance Company, and as such has certain interests in Penn Millers Mutual, including the right to vote for the election of directors and certain other corporate transactions, and the right to receive dividends if, as and when declared by the board of directors of the Company.

Members of mutual insurance companies also have rights in the unlikely event of a solvent dissolution of a mutual company. Under Pennsylvania law, it is unclear how mutual members are treated in this case. One provision of Pennsylvania law applies to all nonstock corporations. Under this provision, unless otherwise provided in the articles, bylaws or the documents evidencing membership in the nonstock corporation, upon a solvent dissolution, members have the right to receive a pro rata distribution of any surplus remaining after the satisfaction of all claims and other liabilities of the company. A more recent provision of Pennsylvania law, specifically applicable to mutual insurance companies, states that any surplus of a mutual insurance company remaining after satisfaction of all claims and liabilities escheats to the Commonwealth of Pennsylvania. In the view of the Department, the more recent statute is controlling.

A member of Penn Millers Mutual must have an effective insurance policy issued by Penn Millers Insurance Company. However, this membership interest has no market value because it cannot be separated from the underlying policy and in any event is not transferable. A policyholder whose policy is terminated loses the membership interest. As of the completion of the Conversion, all member interests in Penn Millers Mutual described herein will terminate. However, the termination of your membership interest will not change your insurance coverage or premiums.

If the Plan of Conversion is not approved by Penn Millers Mutual’s Record Date Members or if the Conversion fails to be completed for any other reason, Penn Millers Mutual will continue as a mutual holding company. In this case, the Record Date Members will retain the rights described above.

Continuity of Insurance Coverage and Business Operations.  The Conversion will not change the insurance protection or premiums under individual insurance policies with Penn Millers Insurance Company. During and after the Conversion, the normal business of Penn Millers Insurance Company of issuing insurance policies in exchange for premium payments and processing and paying claims will continue without change or interruption. After the Conversion, Penn Millers Insurance Company will continue to provide services for members under current policies and by its present management and staff.

The Board of Directors serving Penn Millers Mutual at the time of the Conversion will serve as the Board of Directors of Penn Millers Mutual after the Conversion. The Board of Directors of the Holding Company will consist of the following persons, each of whom is an existing director of Penn Millers Mutual: Heather M. Acker, F.

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Kenneth Ackerman, Jr., Dorrance R. Belin, John L. Churnetski, John M. Coleman, Douglas A. Gaudet, Kim E. Michelstein, Robert A. Nearing, Jr., Donald A. Pizer, James M. Revie, J. Harvey Sproul, Jr. All officers of Penn Millers Mutual at the time of the Conversion will retain their positions with Penn Millers Mutual after the Conversion.

Voting Rights.  After the Conversion, the voting rights of all members in Penn Millers Mutual will cease. Members will no longer have the right to elect the directors of Penn Millers Mutual or approve transactions involving Penn Millers Mutual. Instead, voting rights in Penn Millers Mutual will be held by the Holding Company, which will own all the capital stock of the converted Penn Millers Mutual. Voting rights in the Holding Company will be held by the shareholders of the Holding Company. Each holder of common stock will be entitled to vote on any matter to be considered by the shareholders of the Holding Company, subject to the terms of the Holding Company’s articles of incorporation and bylaws and to the provisions of Pennsylvania and federal law.

Dividends.  Currently, dividends are paid only if, as and when declared by the board of directors of Penn Millers Mutual. Penn Millers Mutual has never declared a member dividend. After the Conversion, the Holding Company will have the exclusive right to receive any dividends paid by Penn Millers Mutual, and the shareholders of the Holding Company will have the exclusive rights to receive any dividends paid by the Holding Company.

Rights Upon Dissolution.  As discussed above, it is unclear what right members would have if there were a solvent dissolution of Penn Millers Mutual. However, it is clear that after the Conversion, members will no longer have the right to receive a pro rata distribution of any remaining surplus of Penn Millers Mutual. Instead, this right will vest in the Holding Company as the sole shareholder of Penn Millers Mutual. In the event of a liquidation, dissolution or winding up of the Holding Company, shareholders of the Holding Company would be entitled to receive, after payment of all debts and liabilities of the Holding Company, a pro rata portion of all assets of the Holding Company.

Federal Income Tax Considerations

General

The statements of United States federal income tax law, or legal conclusions with respect to United States federal income tax law, in the following discussion constitute the opinion of Stevens & Lee on the material federal income tax considerations to:

•  Penn Millers Mutual upon the conversion of Penn Millers Mutual from a mutual holding company to a stock holding company;

•  eligible members that are U.S. Persons that hold their membership interests in Penn Millers Mutual as a capital asset within the meaning of Section 1221 of the Internal Revenue Code of 1986, as amended (which we refer to as the Code), of the receipt, exercise and lapse of subscription rights to purchase shares of the common stock of Penn Millers Holding Corporation (which we refer to as our common stock) in the subscription offering;

•  eligible members that are U.S. Persons that purchase shares of Holding Company common stock in the Subscription Offering upon the exercise of subscription rights and hold their shares of Holding Company common stock as a capital asset within the meaning of Section 1221 of the Code, of the acquisition, ownership and disposition of shares of common stock purchased in the Subscription Offering; and

•  other investors that are U.S. Persons that purchase shares of common stock in the Community Offering and hold their shares of common stock as a capital asset within the meaning of Section 1221 of the Code, of the acquisition, ownership and disposition of shares of common stock purchased in the Community Offering.

The following discussion is based, primarily, on private letter rulings that have been issued by the Internal Revenue Service to certain corporations unrelated to Penn Millers that have engaged in transactions that are analogous to the conversion. Under the Code, private letter rulings are directed only to the taxpayer that requested the rulings and they may not be used or cited as precedent by other taxpayers. In addition, some of the discussion below under “— Tax Consequences of Subscription Rights ,” is outside the scope of the private letter rulings that have been issued by the Internal Revenue Service and is based on the Code, Treasury regulations promulgated under

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the Code, judicial authorities, published positions of the Internal Revenue Service and other applicable authorities, all as in effect on the date of this discussion and all of which are subject to change (possibly with retroactive effect) and to differing interpretations. No assurance can be given that the Internal Revenue Service would not assert, or that a court would not sustain, a position contrary to any part of the discussion under “— Tax Consequences of Subscription Rights,” below.

The following discussion is directed solely to eligible members of Penn Millers Mutual that are U.S. Persons and hold membership interests in a qualifying policy as a capital asset within the meaning of Section 1221 of the Code, and it does not purport to address all of the United States federal income tax consequences that may be applicable to Penn Millers Mutual or to the individual circumstances of particular categories of eligible members of Penn Millers Mutual, in light of their specific circumstances. For example, if a partnership holds membership interests in a qualifying policy, the tax treatment of a partner will generally depend on the status of the partner and the activities of the partnership. If you are a partner of a partnership that holds membership interests in a qualifying policy, you should consult your tax advisor. In addition, the following discussion does not address aspects of United States federal income taxation that may be applicable to eligible members of Penn Millers Mutual subject to special treatment under the Code, such as financial institutions, insurance companies, pass-through entities, regulated investment companies, real estate investment trusts, financial asset securitization investment trusts, dealers or traders in securities, or tax-exempt organizations, or any aspect of the U.S. alternative minimum tax or state, local or foreign tax consequences of the proposed transactions.

For purposes of this discussion, the term “U.S. Person” means (a) a citizen or resident of the United States, (b) a corporation, or entity treated as corporation, created or organized in or under the laws of the United States or any political subdivision thereof, (c) an estate the income of which is subject to United States federal income taxation regardless of its source, (d) a trust if either (i) a court within the United States is able to exercise primary supervision over the administration of such trust and one or more U.S. Persons have the authority to control all substantial decisions of such trust or (ii) the trust has a valid election in effect to be treated as a U.S. Person for United States federal income tax purposes, or (e) any other person or entity that is treated for United States federal income tax purposes as if it were one of the foregoing.

This discussion does not constitute tax advice and is not intended to be a substitute for careful tax planning. Each eligible member is urged to consult its own tax advisor with respect to the U.S. federal, state, local and non-U.S. income and other tax consequences of the receipt, exercise and lapse of subscription rights to purchase shares of Holding Company common stock in the Subscription Offering. Each prospective purchaser of shares of Holding Company common stock is urged to consult its own tax advisor with respect to the U.S. federal, state, local and non-U.S. income and other tax consequences of the acquisition, ownership and disposition of shares of common stock purchased in the Offerings.

The Conversion

For federal income tax purposes:

•  the conversion of Penn Millers Mutual from a mutual holding company to a stock holding company will be a reorganization within the meaning of Section 368(a)(1)(E) of the Code;

•  Penn Millers Mutual in its post-conversion stock form will constitute one and the same taxable entity as Penn Millers Mutual in its pre-conversion mutual form;

•  neither Penn Millers Mutual in its pre-conversion mutual form nor Penn Millers Mutual in its post-conversion stock form will recognize gain or loss as a result of the conversion; and

•  the tax attributes of Penn Millers Mutual in its pre-conversion mutual form will remain unchanged as tax attributes of Penn Millers Mutual in its post-conversion stock form. Thus, Penn Millers Mutual’s basis in its assets, holding period for its assets, net operating loss carryovers, if any, capital loss carryovers, if any, earnings and profits and accounting methods will not be changed by reason of the conversion.

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Tax Consequences of Subscription Rights

Generally, the federal income tax consequences of the receipt, exercise and lapse of subscription rights are uncertain. They present novel issues of tax law that are not adequately addressed by any direct authorities. Nevertheless, based upon the advice of Stevens & Lee, we believe, and we intend to take the position that, for U.S. federal income tax purposes:

•  eligible members will be treated as transferring their membership interests in Penn Millers Mutual to Penn Millers Holding Corporation in exchange for subscription rights to purchase Holding Company common stock;

•  any gain realized by an eligible member as a result of the receipt of a subscription right with a fair market value must be recognized, whether or not such right is exercised;

•  the amount of gain that must be recognized by an eligible member as a result of the receipt of a subscription right will equal the fair market value of such subscription right;

•  any gain recognized by an eligible member as a result of the receipt of a subscription right with a fair market value should constitute a capital gain, which will be long term capital gain if the eligible member has held its membership interests for more than one year; and

•  if an eligible member is required to recognize gain on the receipt of a subscription right and does not exercise such subscription right, (i) the eligible member should recognize a corresponding loss upon the expiration or lapse of such member’s unexercised subscription right, (ii) the amount of that loss should equal the gain previously recognized upon receipt of the unexercised subscription right, and (iii) if the common stock that an eligible member would have received upon exercise of the lapsed subscription right would have constituted a capital asset in the hands of that eligible member, the resulting loss upon expiration of the subscription right should constitute a capital loss.

For purposes of determining gain, it is unclear how to determine the number of subscription rights that may be allocated to each eligible member during the subscription offering.

Curtis Financial has advised us that it believes the subscription rights will not have any fair market value. Curtis Financial has noted that the subscription rights will be granted at no cost to recipients, will be legally nontransferable and of short duration, and will provide the recipient with the right only to purchase shares of common stock at the same price to be paid by members of the general public in the Community Offering. Curtis Financial cannot assure us, however, that the Internal Revenue Service will not challenge Curtis Financial’s determination or that such challenge, if made, would not be successful. Nevertheless, eligible members are encouraged to consult with their tax advisors about the U.S. federal, state, local and non-U.S. income and other tax consequences of the receipt, exercise and lapse of subscription rights to purchase shares of common stock in the Subscription Offering. See also “— Recent Tax Developments” below.

Tax Consequences to Purchasers of Common Stock in the Offerings

Basis and Holding Period.  The adjusted tax basis of a share of Holding Company common stock purchased by an eligible member pursuant to the exercise of a subscription right will equal the sum of the amount of cash paid for such share plus the basis, if any, of the subscription right that is exercised to purchase such share, taking into account the income and gain, if any, recognized by such eligible member on the receipt of such subscription right, less any prior return of capital distributions in respect of such stock. In all other cases, a holder’s adjusted tax basis in its shares of common stock generally will equal the U.S. holder’s acquisition cost less any prior return of capital distributions in respect of such stock. The holding period of a share of Holding Company common stock purchased by an eligible member through the exercise of a subscription right will begin on the date on which the subscription right is exercised. In all other cases, the holding period of common stock purchased by an eligible member or other investor in the Community Offering will begin on the date following the date on which the stock is purchased.

Dividends and Distributions.  If the Holding Company pays cash distributions to holders of shares of its common stock, such distributions generally will constitute dividends for U.S. federal income tax purposes to the extent paid from current or accumulated earnings and profits, as determined under U.S. federal income tax

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principles. Distributions in excess of current and accumulated earnings and profits will constitute a return of capital that will be applied against and reduce (but not below zero) the holder’s adjusted tax basis in its shares of common stock. Any remaining excess will be treated as gain realized on the sale or other disposition of its shares of common stock and will be treated as described under “— Gain or Loss on Sale, Exchange or Other Taxable Disposition of Common Stock” below.

Dividends paid to a U.S. holder that is a taxable corporation generally will qualify for the dividends received deduction if the requisite holding period is satisfied. With certain exceptions (including, but not limited to, dividends treated as investment income for purposes of investment interest deduction limitations), and provided certain holding period requirements are met, dividends paid to a non-corporate U.S. holder generally will constitute “qualified dividends” that will be subject to tax at the maximum tax rate accorded to capital gains for tax years beginning on or before December 31, 2010, after which the rate applicable to dividends is currently scheduled to return to the tax rate generally applicable to ordinary income.

Gain or Loss on Sale, Exchange or Other Taxable Disposition of Common Stock.  In general, a holder of shares of Holding Company common stock must treat any gain or loss recognized upon a sale, exchange or other taxable disposition of such shares (which would include a dissolution and liquidation) as capital gain or loss. Any such capital gain or loss will be long-term capital gain or loss if the holder’s holding period for its shares of common stock so disposed of exceeds one year. In general, a holder will recognize gain or loss in an amount equal to the difference between (i) the sum of the amount of cash and the fair market value of any property received in such disposition and (ii) the holder’s adjusted tax basis in its shares of common stock so disposed of. Long-term capital gain realized by a non-corporate holder generally will be subject to a maximum rate of 15 percent for tax years beginning on or before December 31, 2010, after which the maximum long-term capital gains rate is scheduled to increase to 20 percent. The deduction of capital losses is subject to limitations, as is the deduction for losses realized upon a taxable disposition by a holder of its shares of common stock if, within a period beginning 30 days before the date of such disposition and ending 30 days after such date, such holder has acquired (by purchase or by an exchange on which the entire amount of gain or loss was recognized by law), or has entered into a contract or option so to acquire, substantially identical stock or securities.

Recent Tax Developments

We call to your attention that, on August 6, 2008, the opinion of the United States Court of Federal Claims was filed in the case of Eugene A. Fisher, Trustee, Seymour P. Nagan Irrevocable Trust, Plaintiff, v. The United States, Defendant (No. 04-1726T), in which the court ruled that a policyholder of Sun Life Assurance Company that, in the course of the demutualization of Sun Life in a recapitalization that constituted a reorganization under the Code, (a) exchanged its voting and liquidation rights in Sun Life for shares of the common stock of a new holding company that would become the corporate parent of Sun Life (the “Exchange Shares”), and (b) sold the Exchange Shares on the open market, did not realize any income for federal income tax purposes on the sale of the Exchange Shares, because the amount realized by the policyholder on the sale of the Exchange Shares was less than the policyholder’s cost basis in its Sun Life insurance policy as a whole. The opinion of the court is contrary to the long-standing published position of the Internal Revenue Service that the basis of stock received by a policyholder in the course of a mutual insurance company’s demutualization in a series of transactions that constitute a reorganization within the meaning of Section 368(a) of the Code is zero. We understand that the government has appealed the court’s decision.

The plan of conversion and the law considered by the court in Fisher were substantially different than Penn Millers Mutual’s Plan of Conversion and the corresponding law of Pennsylvania. Nevertheless, if the principles articulated by the court in Fisher were determined to be applicable to the Subscription Offering: (a) eligible members would not be required to recognize any income or gain upon the receipt of subscription rights with a fair market value if the fair market value of the subscription rights did not exceed the eligible policyholder’s cost basis in its Penn Millers insurance policy as a whole; and (b) the basis of the shares of Holding Company common stock purchased by an eligible member pursuant to the exercise of subscription rights would equal the sum of the purchase price of the stock plus the eligible member’s adjusted tax basis in the subscription rights that are exercised.

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You should consult your tax advisors with respect to the potential tax consequences to you of the receipt, exercise and lapse of subscription rights and the determination of your adjusted tax basis in your shares of Holding Company common stock, based on your particular circumstances.

Information Reporting and Backup Withholding

The Holding Company must report annually to the Internal Revenue Service and to each holder the amount of dividends or other distributions it pays to such holder on its shares of common stock and the amount of tax withheld with respect to those distributions, regardless of whether withholding is required.

The gross amount of dividends and proceeds from the disposition of shares of common stock paid to a holder that fails to provide the appropriate certification in accordance with applicable U.S. Treasury regulations generally will be subject to backup withholding at the applicable rate (currently 28 percent).

Backup withholding is not an additional tax. Any amounts we withhold under the backup withholding rules may be refunded or credited against the holder’s U.S federal income tax liability, if any, by the Internal Revenue Service if the required information is furnished to the Internal Revenue Service in a timely manner.

DUE TO THE INDIVIDUAL NATURE OF TAX CONSEQUENCES, EACH ELIGIBLE MEMBER AND EACH OTHER PROSPECTIVE PURCHASER OF SHARES OF COMMON STOCK IN THE OFFERINGS IS URGED TO CONSULT HIS OR HER TAX AND FINANCIAL ADVISOR.

Interpretation of the Plan of Conversion

All interpretations of the Plan by a majority of the board of directors of Penn Millers Mutual and the board of directors of the Holding Company will be final, subject to the limitations of applicable law.

Amendment and Termination

The Plan may be substantively amended at any time by the Board of Directors of Penn Millers Mutual as a result of comments from regulatory authorities, including the Pennsylvania Insurance Department, or for any other reason. The Plan may be terminated at any time by and in the sole discretion of the Board of Directors of Penn Millers Mutual.

Certain Benefits to Employees & Directors

In connection with the Conversion and Offerings, the Holding Company has adopted an employee stock ownership plan, or ESOP, for the exclusive benefit of participating employees, to be implemented upon completion of the Offerings. The ESOP is expected to borrow funds to purchase 9.99% of the shares of Holding Company common stock sold in the Offerings. Under the ESOP, shares of Holding Company common stock will be allocated annually to employees of the Holding Company and its subsidiaries over a 10 year period on the basis of their respective annual wages and their value will be charged against the Company as an employee benefit expense. Employees must be employed at least 1,000 hours in a calendar year in order to receive an allocation. In addition, the Holding Company intends to adopt a stock-based incentive plan pursuant to which the Holding Company could: (i) award employees and directors of the Holding Company and its affiliates up to 4% of the number of shares of Holding Company common stock sold in the Offerings as restricted stock awards or through vesting of restricted stock unit awards, and (ii) grant options to acquire Holding Company common stock to employees and directors of the Holding Company and its affiliates, in an amount up to 10% of the number of shares of Holding Company common stock sold in the Offerings. The stock-based incentive plan is subject to approval by the Holding Company’s shareholders at the first meeting of shareholders to be held no sooner than six months after the consummation of the Offerings. No decisions concerning the number of shares to be awarded or options to be granted to any director or employee have been made at this time. For a more detailed description of the benefits to employees and directors, including executive employment agreements and executive compensation, see the accompanying prospectus.

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AMENDED AND RESTATED ARTICLES OF INCORPORATION OF PENN MILLERS MUTUAL

The following is a summary of certain provisions of the Amended and Restated Articles of Incorporation of Penn Millers Mutual attached hereto as Exhibit B. The Amended and Restated Articles of Incorporation will become effective upon the completion of the Conversion.

Pursuant to the Amended and Restated Articles of Incorporation, Penn Millers Mutual will change its name to “PMMHC Corp.” The Amended and Restated Articles of Incorporation will authorize Penn Millers Mutual to issue 1,000,000 shares of common stock, $0.01 par value per share. All of Penn Millers Mutual’s outstanding common stock will be issued to and owned by the Holding Company. Accordingly, exclusive voting rights with respect to the affairs of Penn Millers Mutual after the Conversion will be vested in the Board of Directors of the Holding Company. Penn Millers Mutual’s Amended and Restated Articles of Incorporation will provide that such Articles may be amended only if such amendment is approved by the Board of Directors of Penn Millers Mutual, and, if and to the extent required by law, approved by the Department and the shareholders of Penn Millers Mutual (i.e., the Holding Company).

A vote in favor of the Plan also will constitute a vote to approve the Amended and Restated Articles of Incorporation of Penn Millers Mutual.

RECOMMENDATION OF THE BOARD OF DIRECTORS

THE BOARD OF DIRECTORS OF PENN MILLERS MUTUAL UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR” APPROVAL OF THE PLAN AND THE RELATED AMENDED AND RESTATED ARTICLES OF INCORPORATION. VOTING IN FAVOR OF THE PLAN WILL NOT OBLIGATE YOU TO PURCHASE COMMON STOCK IN THE OFFERING.

ADDITIONAL INFORMATION

YOUR BOARD OF DIRECTORS URGES YOU TO CONSIDER CAREFULLY THIS PROXY MATERIAL AND, WHETHER OR NOT YOU PLAN TO BE PRESENT IN PERSON AT THE SPECIAL MEETING, TO FILL IN, DATE, SIGN AND PROMPTLY RETURN THE ENCLOSED PROXY CARD AS SOON AS POSSIBLE TO ASSURE THAT YOUR VOTE WILL BE COUNTED. YOU MAY ALSO VOTE BY INTERNET OR TELEPHONE AS OUTLINED ON THE PROXY CARD. THIS WILL NOT PREVENT YOU FROM VOTING IN PERSON IF YOU ATTEND THE SPECIAL MEETING. YOU MAY REVOKE YOUR PROXY BY WRITTEN INSTRUMENT DELIVERED TO THE SECRETARY OF PENN MILLERS MUTUAL AT ANY TIME PRIOR TO OR AT THE SPECIAL MEETING OR BY ATTENDING THE SPECIAL MEETING AND VOTING IN PERSON.

THIS PROXY STATEMENT IS NOT AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY SHARES OF HOLDING COMPANY COMMON STOCK. SUCH OFFERS MAY BE MADE ONLY BY THE PROSPECTUS.

BY ORDER OF THE BOARD OF DIRECTORS

Douglas A. Gaudet

President, Chief Executive Officer and Director

September 8, 2009

Wilkes-Barre, Pennsylvania

IF YOU HAVE ANY QUESTIONS, PLEASE CONTACT US AT (877) 764-2743, BETWEEN THE HOURS OF 10:00 A.M. AND 4:00 P.M.

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EXHIBIT A

PLAN OF CONVERSION

PENN MILLERS MUTUAL HOLDING COMPANY
PLAN OF CONVERSION
FROM MUTUAL TO STOCK FORM
Adopted by the Board of Directors on April 22, 2009

PENN MILLERS MUTUAL HOLDING COMPANY

PLAN OF CONVERSION

FROM MUTUAL TO STOCK FORM

1.  GENERAL.

Penn Millers Mutual Holding Company (“PMMHC”) is a Pennsylvania mutual corporation with a wholly-owned subsidiary, PMHC Corp. (“PMHC”), and is the mutual holding company for Penn Millers Insurance Company (“PMIC”). On April 22, 2009, the Board of Directors of PMMHC, after careful study and consideration, unanimously adopted this Plan of Conversion (the “Plan”). Under this Plan, PMMHC proposes to convert from mutual to stock form and to offer and sell shares of the common stock of Penn Millers Holding Corporation (“HoldCo” and together with HoldCo, PMIC, PMHC and PMMHC, the “Company”), a newly formed holding company for PMMHC (the “Common Stock”). The shares of Common Stock will be offered and sold first to qualifying offerees under the Subscription Offering and then to qualifying offerees under the Community Offering (each as hereinafter defined).

Because it involves the conversion of PMMHC from mutual to stock form, this Plan must be approved by the Pennsylvania Insurance Commissioner pursuant to the Commissioner’s 1998 Order approving the conversion transaction by which the Company’s current mutual holding company structure was created. Accordingly, and in order to ensure that this Plan is fair to members of PMMHC, the Company has discussed this Plan with senior staff at the Pennsylvania Insurance Department (“PID”), and, as a condition to the Offering, will obtain from the Insurance Commissioner an approval of the Offering or, as applicable, will obtain written confirmation from the Commissioner that such approval is not required and that the Company may proceed with the Offering.

This Plan is subject to the approval of the members of PMMHC in accordance with Section 2105 of the Pennsylvania Business Corporation Law of 1988, as amended, as provided in Section 10 and Section 11 hereof.

2.  DEFINITIONS.

As used in this Plan, the terms set forth below have the following meanings:

2.1 “Affiliate” means a Person who, directly or indirectly, through one or more intermediaries, controls or is controlled by or is under common control with the Person specified.

2.2 “Appraised Value” means the final estimated consolidated pro forma market value of PMMHC, as determined by the Independent Appraiser at the conclusion of the Offering.

2.3 “Associate” when used to indicate a relationship with any Person, means (i) a corporation or organization (other than the Company or a majority-owned subsidiary of the same) of which such Person is a director, officer or partner or is, directly or indirectly, the beneficial owner of 10% or more of any class of equity securities; (ii) any trust or other estate in which such Person has a substantial beneficial interest or as to which such Person serves as trustee or in a similar fiduciary capacity (exclusive of any Tax-Qualified Employee Stock Benefit Plan or Non-Tax Qualified Employee Stock Benefit Plan of HoldCo or the Company); (iii) any relative or spouse of such Person, or any relative of such spouse, who has the same home as such Person or who is a Director or Officer of the Company, or any of its subsidiaries; and (iv) any Person acting in concert with any of the Persons or entities specified in clauses (i) through (iii) above.

2.4 “Code” means the Internal Revenue Code of 1986, as amended.

2.5 “Commissioner’s 1998 Order” means the 1998 order of the Pennsylvania Insurance Commissioner approving the conversion transaction by which the Company’s current mutual holding company structure was created.

2.6 “Common Stock” means common stock, par value $0.01 per share, of HoldCo.

2.7 “Community Offering” means the offering for sale by HoldCo of any shares of Common Stock not subscribed for in the Subscription Offering as set forth in Section 6 hereof. HoldCo may retain the assistance of a broker-dealer or syndicate of broker-dealers to assist it in connection with the sale of Common Stock in the Community Offering.

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2.8 “Company” means HoldCo, PMIC, PMHC and PMMHC.

2.9 “Conversion” means: (i) the amendment of the articles of incorporation of PMMHC to authorize the issuance of shares of capital stock and to conform to the requirements of a stock corporation under the laws of the Commonwealth of Pennsylvania, and (ii) the offer and sale of Common Stock by HoldCo in the Offering.

2.10 “Director” means any Person who is a director of the Company or any subsidiary thereof.

2.11 “Effective Date” means the date of closing of the sale of shares of Common Stock in the Offering conducted pursuant to this Plan.

2.12 “Eligibility Record Date” means the close of business on April 22, 2009, the effective date of the adoption of the Plan by the Board of Directors of PMMHC.

2.13 “Eligible Member” means a Person who, on the Eligibility Record Date, is (i) a Person who is a named insured under a Qualifying Policy that is a group policy, or (ii) a Person who is a named insured under a Qualifying Policy that is an individual policy.

2.14 “Employee” means any natural person who is a full or part-time employee of the Company or any of its subsidiaries at the Effective Date.

2.15 “ESOP” means the employee stock ownership plan to be established by HoldCo or the Company as a Tax-Qualified Employee Stock Benefit Plan.

2.16 “HoldCo” means Penn Millers Holding Corporation, a Pennsylvania corporation that will become the holding company for PMMHC in connection with the Conversion.

2.17 “Independent Appraiser” means the independent investment banking or financial consulting firm retained by the Company to determine the Valuation Range and Appraised Value.

2.18 “Insider” means any Officer or Director of the Company or any Affiliate of the Company, and any Person acting in concert with any such Officer or Director.

2.19 “MRPs” means any restricted stock plan, such as a management recognition plan established or to be established by HoldCo or any of its affiliates.

2.20 “Offering” means the offering of shares of Common Stock pursuant to this Plan in the Subscription Offering and the Community Offering or any Public Offering.

2.21 “Officer” means the chairman of the board of directors, president, vice-president (but not an assistant vice president, second vice president or other vice president having authority similar to an assistant or second vice president), secretary, treasurer or principal financial officer, controller or principal accounting officer and any other Person performing similar functions with respect to any organization whether incorporated or unincorporated.

2.22 “Option Plan” means any stock option plan established or to be established by the Company or any of its subsidiaries.

2.23 “Order Form” means the form provided on behalf of HoldCo, containing all such terms and provisions as set forth in Section 8 hereof, to a Person by which Common Stock may be ordered in the Offering.

2.24 “Participant” means a Person to whom Common Stock is offered under the Subscription Offering.

2.25 “Pennsylvania BCL” means the Pennsylvania Business Corporation Law of 1988, as amended.

2.26 “PID” means the Pennsylvania Insurance Department.

2.27 “Person” means any corporation, partnership, association, limited liability company, trust, or any other entity or a natural person.

2.28 “Plan” means this Plan of Conversion as adopted by the Board of Directors of PMMHC, as it may be amended from time to time pursuant to the terms hereof.

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2.29 “PMHC” means PMHC Corp., a Pennsylvania corporation which is the wholly-owned subsidiary of PMMHC and the holding company for PMIC.

2.30 “PMIC” means Penn Millers Insurance Company, a Pennsylvania insurance company which is the wholly-owned subsidiary of PMHC.

2.31 “PMMHC” means Penn Millers Mutual Holding Company, a Pennsylvania mutual company which is the holding company for PMHC.

2.32 “Prospectus” means the one or more documents to be used in offering the Common Stock in the Subscription Offering and, to the extent applicable, the Community Offering, and for providing information to Persons in connection with the Offering.

2.33 “Public Offering” means an underwritten firm commitment or best efforts offering to the public through one or more underwriters.

2.34 “Purchase Price” means the price per share at which the Common Stock is ultimately sold by HoldCo to Persons in the Offering in accordance with the terms hereof.

2.35 “Qualifying Policy” means a policy of insurance issued by PMIC and in force as of the close of business on the Eligibility Record Date.

2.36 “SEC” means the U.S. Securities and Exchange Commission.

2.37 “Subscription Offering” means the offering of the Common Stock that is described in Section 5 hereof.

2.38 “Subscription Rights” means non-transferable rights to subscribe for Common Stock in the Subscription Offering granted to Participants pursuant to the terms of this Plan.

2.39 “Tax-Qualified Employee Stock Benefit Plan” means any defined benefit plan or defined contribution plan, such as an employee stock ownership plan, stock bonus plan, profit-sharing plan or other plan, which is established for the benefit of the Employees of the Company or any of its subsidiaries and which, with its related trust, meets the requirements to be qualified under Section 401 of the Code as from time to time in effect. A “Non-Tax-Qualified Employee Stock Benefit Plan” is any defined benefit plan or defined contribution plan which is not so qualified.

2.40 “Valuation Range” means the range of the estimated aggregate pro forma market value of the total number of shares of Common Stock to be issued in the Offering, as determined by the Independent Appraiser in accordance with Section 3 hereof.

2.41 “Voting Record Date” means the date established by the Board of Directors of PMMHC to determine members eligible to vote at the special meeting of members called to vote to approve the Plan, as provided in Section 11 hereof.

3.  TOTAL NUMBER OF SHARES AND PURCHASE PRICE OF COMMON STOCK.

The number of shares of Common Stock required to be offered and sold by HoldCo in the Offering will be determined as follows:

(a) Independent Appraiser.  The Independent Appraiser will be retained by the Company to determine the Valuation Range. The Valuation Range will consist of a midpoint valuation, a valuation fifteen percent (15%) above the midpoint valuation (the “Maximum of the Valuation Range”) and a valuation fifteen percent (15%) below the midpoint valuation (the “Minimum of the Valuation Range”). The Valuation Range will be based upon the financial condition and results of operations of the Company, a comparison of the Company with comparable publicly-held insurance companies, and such other factors as the Independent Appraiser may deem to be relevant, including that value which the Independent Appraiser estimates to be necessary to attract a full subscription for the Common Stock. The Independent Appraiser will submit to PMMHC the Valuation Range and a related report that describes the data and methodology used to determine the Valuation Range.

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(b) Purchase Price.  The Purchase Price is a per share price for Common Stock that will be uniform as to all purchasers in the Offering and will be determined by HoldCo.

(c) Number of Shares of Common Stock to be Offered.  The maximum number of shares of Common Stock to be offered in the Offering shall be equal to the sum of: (i) the Maximum of the Valuation Range divided by the Purchase Price, plus (ii) the number of shares required to enable the ESOP to purchase in the aggregate ten percent (10%) of the total shares of Common Stock issued in the Offering.

(d) Number of Shares of Common Stock to be Sold.  Immediately following the completion of the Offering, the Appraiser will submit to PMMHC the Appraised Value as of the last day of the Offering. If the Appraised Value does not fall within the Valuation Range, then PMMHC may cancel the Offering and terminate this Plan, establish a new Valuation Range and extend, reopen or hold a new Offering, or take such other action as it deems to be reasonably necessary.

(e) If the Appraised Value falls within the Valuation Range, the following steps will be taken:

(i) Subscription Offering Meets or Exceeds Maximum.  If the number of shares to which Participants subscribe in the Subscription Offering multiplied by the Purchase Price is equal to or greater than the Maximum of the Valuation Range, then HoldCo on the Effective Date shall issue shares of Common Stock to the subscribing Participants; provided, however, that the number of shares of Common Stock issued shall not exceed the number of shares of Common Stock offered in the Offering. In the event of an oversubscription in the Subscription Offering, shares of Common Stock shall be allocated among the subscribing Participants as provided in Sections 5 and 6 below; provided, however, that no fractional shares of Common Stock shall be issued.

(ii) Subscription Offering Meets or Exceeds Minimum.  If the number of shares of Common Stock subscribed for by Participants in the Subscription Offering multiplied by the Purchase Price is equal to or greater than the Minimum of the Valuation Range, but less than the Maximum of the Valuation Range, then HoldCo on the Effective Date shall issue shares of Common Stock to the subscribing Participants in an amount sufficient to satisfy the subscriptions of such Participants in full. To the extent that shares of Common Stock remain unsold after the subscriptions of all Participants in the Subscription Offering have been satisfied in full, HoldCo shall have the right in its absolute discretion to accept, in whole or in part, subscriptions received from subscribers in the Community Offering; provided, however, that the number of shares of Common Stock issued shall not exceed the Maximum of the Valuation Range; and, provided further, that no fractional shares of Common Stock shall be issued.

(iii) Subscription Offering Does Not Meet Minimum.  If the number of shares of Common Stock subscribed for by Participants in the Subscription Offering multiplied by the Purchase Price is less than the Minimum of the Valuation Range, then in such event HoldCo may accept subscriptions received from subscribers in the Community Offering. If the aggregate number of shares of Common Stock subscribed for in the Subscription Offering together with the orders for shares accepted in the Community Offering multiplied by the Purchase Price is equal to or greater than the Minimum of the Valuation Range, then on the Effective Date HoldCo shall: (A) issue shares of Common Stock to subscribing Participants in an amount sufficient to satisfy the subscriptions of such Participants in full, and (B) issue to subscribers in the Community Offering whose orders have been accepted such additional number of shares of Common Stock such that the aggregate number of shares of Common Stock to be issued to subscribing Participants and to subscribers in the Community Offering multiplied by the Purchase Price shall be equal to the Minimum of the Valuation Range; provided, however, that no fractional shares of Common Stock shall be issued. HoldCo may in its absolute discretion elect to issue shares of Common Stock to subscribers in the Community Offering in excess of the number determined by reference to clause (B) of the preceding sentence; provided, however, that the number of shares of Common Stock issued shall not exceed the Maximum of the Valuation Range.

(iv) Offering Does Not Meet Minimum.  If the aggregate number of shares of Common Stock subscribed for in the Subscription Offering together with the orders for shares accepted in the Community Offering multiplied by the Purchase Price is less than the Minimum of the Valuation Range, then in such

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event HoldCo may (w) cancel the Offering and terminate this Plan, (x) establish a new Valuation Range, (y) extend, reopen or hold a new Offering, or (z) take such other action as it deems reasonably necessary. If a new Valuation Range is established and the Offering is extended, reopened or continued as part of a new Offering, Persons who previously submitted subscriptions will be required to confirm, revise or cancel their original subscriptions. If original subscriptions are canceled, any related payment will be refunded (without interest).

If, following a reduction in the Valuation Range, the aggregate number of shares of Common Stock subscribed for, or for which orders have been accepted, in the Offering multiplied by the Purchase Price is equal to or greater than the Minimum of the Valuation Range (as such Valuation Range has been reduced), then HoldCo on the Effective Date shall: (i) issue shares of Common Stock to Participants in the Subscription Offering in an amount sufficient to satisfy the subscriptions of such subscribers in full, and (ii) issue to purchasers in the Community Offering whose orders have been accepted such additional number of shares of Common Stock such that the aggregate number of shares of Common Stock to be issued multiplied by the Purchase Price shall be at least equal to the Minimum of the Valuation Range (as such Valuation Range has been reduced).

(v) Participant Eligibility.  Notwithstanding anything to the contrary set forth in this Plan, HoldCo shall have the right in its absolute discretion and without liability to any subscriber, purchaser, underwriter or any other Person to determine which proposed Persons and which subscriptions and orders in the Offering meet the criteria provided in this Plan for eligibility to purchase Common Stock and the number of shares eligible for purchase by any Person. HoldCo’s determination of these matters shall be final and binding on all parties and all Persons. HoldCo shall have absolute and sole discretion to accept or reject, in whole or in part, any offer to purchase that is made or received in the course of the Community Offering, irrespective of a Person’s eligibility under this Plan to participate in the Community Offering.

4.  GENERAL PROCEDURE FOR THE OFFERINGS.

As soon as practicable after the registration of the Common Stock under the Securities Act of 1933, as amended, and after the receipt of all required regulatory approvals, the Common Stock shall be first offered for sale in a Subscription Offering. It is anticipated that any shares of Common Stock remaining unsold after the Subscription Offering will be sold through a Community Offering. The purchase price per share for the Common Stock shall be a uniform price determined in accordance with Section 3 hereof.

5.  SUBSCRIPTION OFFERING.

Subscription Rights to purchase shares of Common Stock at the Purchase Price will be distributed by HoldCo to the Participants in the following priorities:

(a) Eligible Members (First Priority).  Each Eligible Member shall receive, without payment, non-transferable Subscription Rights to purchase up to five percent (5%) of the total shares of Common Stock sold in the Offering (or such maximum purchase limitation as may be established for the Community Offering or Public Offering); provided, however, that the maximum number of shares that may be purchased by Eligible Members in the aggregate shall be equal to the Maximum of the Valuation Range divided by the Purchase Price.

In the event of an oversubscription for shares of Common Stock pursuant to Section 5(a), available shares shall be allocated among subscribing Eligible Members so as to permit each such Eligible Member, to the extent possible, to purchase a number of shares which will make his or her total allocation equal to the lesser of (i) the number of shares subscribed for or (ii) 1,000 shares. Any shares of Common Stock remaining after such initial allocation will be allocated among the subscribing Eligible Members whose subscriptions remain unsatisfied in the proportion in which (i) the aggregate number of shares as to which each such Eligible Member’s subscription remains unsatisfied bears to (ii) the aggregate number of shares as to which all such Eligible Members’ subscriptions remain unsatisfied; provided, however, that no fractional shares of Common Stock shall be issued. If, because of the magnitude of the oversubscription, shares of Common Stock cannot be allocated among subscribing Eligible Members so as to permit each such Eligible Member to purchase the lesser of 1,000 shares or the number of shares subscribed for, then shares of Common Stock will be allocated among the subscribing Eligible Members in the proportion in which: (i) the aggregate number of shares

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subscribed for by each such Eligible Member bears to (ii) the aggregate number of shares subscribed for by all Eligible Members; provided, however, that no fractional shares of Common Stock shall be issued.

(b) ESOP (Second Priority).  The ESOP shall receive, without payment, non-transferable Subscription Rights to purchase at the Purchase Price a number of shares of Common Stock equal to ten percent (10%) of the total number of shares of Common Stock to be issued in the Offering as set forth in Section 3(c). An oversubscription by Eligible Members shall not reduce the number of shares of Common Stock that may be purchased by the ESOP under this section.

(c) Directors, Officers and Employees (Third Priority).  Each Director, Officer and Employee shall receive, without payment, non-transferable Subscription Rights to purchase up to five percent (5%) of the total shares of Common Stock sold in the Offering (or such maximum purchase limitation as may be established for the Community Offering or Public Offering); provided, however, that such Subscription Rights shall be subordinated to the Subscription Rights of the Eligible Members and the ESOP; and provided, further, that such Subscription Rights may be exercised only to the extent that there are shares of Common Stock that could have been purchased by Eligible Members and the ESOP, but which remain unsold after satisfying the subscriptions of all Eligible Members and the ESOP; provided, however, that the aggregate number of shares purchased by all of the Directors, Officers and Employees and their Associates shall not exceed 35% of the total number of shares issued in the Offering. In the event of an oversubscription among the Directors, Officers, and Employees the subscription of any one Director, Officer or Employee shall be equal to the product of (i) the number of shares available for subscription by all Directors, Officers, and Employees, and (ii) a fraction, expressed as a percentage, the numerator of which is the number of shares to which the subscribing Director, Officer or Employee subscribed and the denominator of which is the total number of shares subscribed by all Directors, Officers and Employees.

A Director, Officer or Employee who subscribes to purchase shares of Common Stock and who also is eligible to purchase shares of Common Stock as an Eligible Member will be deemed to purchase Common Stock first in his or her capacity as an Eligible Member.

(d) Limitations on Subscription Rights.  Subscription rights granted under this Plan will be nontransferable, nonnegotiable personal rights to subscribe for and purchase shares of Common Stock at the purchase price established hereunder. Subscription Rights under this Plan will be granted without payment, but subject to all the terms, conditions and limitations of this Plan. Any Person purchasing Common Stock hereunder will be deemed to represent and affirm to HoldCo and the Company that such Person is purchasing for his or her own account and not on behalf of any other Person.

6.  COMMUNITY OFFERING OR PUBLIC OFFERING.

(a) If less than the total number of shares of the Common Stock are sold in the Subscription Offering, it is anticipated that remaining shares of Common Stock shall, if practicable, be sold by HoldCo in the Community Offering.

(b) In the Community Offering, HoldCo may accept, in its sole and absolute discretion, orders received from the following categories of preferred purchasers before accepting orders from the general public:

(i) licensed insurance agencies and/or brokers that have been appointed by or otherwise are under contract with PMIC to market and distribute policies of insurance;

(ii) named insureds under policies of insurance issued by PMIC after the Eligibility Record Date; and

(iii) natural persons and trusts of natural persons (including individual retirement and Keogh retirement accounts and personal trusts in which such natural persons have substantial interests) who are residents of Lackawanna or Luzerne County, Pennsylvania.

(c) A Prospectus and an Order Form shall be furnished to such Persons as the Company may select in connection with the Community Offering, and each order for Common Stock in the Community Offering shall be subject to the absolute right of HoldCo to accept or reject any such order in whole or in part either at the time of receipt of an order or as soon as practicable following completion of the Community Offering. In the event of an

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oversubscription, subject to the preferences described above and the right of HoldCo to accept or reject, in its sole discretion, any order received in the Community Offering, any available shares will be allocated so as to permit each purchaser whose order is accepted in the Community Offering to purchase, to the extent possible, the lesser of 1,000 shares and the number of shares subscribed for by such person. Thereafter, any shares remaining will be allocated among purchasers whose orders have been accepted but remain unsatisfied on a pro rata basis, provided no fractional shares shall be issued.

(d) HoldCo may commence the Community Offering concurrently with, at any time during, or as soon as practicable after the end of, the Subscription Offering, and the Community Offering must be completed within 45 days after the completion of the Subscription Offering, unless extended by HoldCo.

(e) HoldCo may sell any shares of Common Stock remaining following the Subscription Offering and Community Offering in a Public Offering, if desired. The provisions of Section 7 shall not be applicable to the sales to underwriters for purposes of the Public Offering, but shall be applicable to sales by the underwriters to the public. The price to be paid by the underwriters in such an offering shall be equal to the Purchase Price less an underwriting discount to be negotiated among such underwriters and HoldCo, subject to any required regulatory approval or consent.

(f) If for any reason a Public Offering of shares of Common Stock not sold in the Subscription Offering and the Community Offering cannot be effected, or if the number of shares of Common Stock remaining to be sold after the Subscription Offering and Community Offering is so small that a Public Offering of those remaining shares would be impractical, the Company shall use its best efforts to obtain other purchases in such manner and upon such condition as may be necessary.

7.  LIMITATIONS ON SUBSCRIPTIONS AND PURCHASES OF COMMON STOCK.

The following additional limitations and exceptions shall apply to all purchases of Common Stock in the Offering:

(a) To the extent that shares are available, no Person may purchase fewer than the lesser of (i) 25 shares of Common Stock or (ii) shares of Common Stock having an aggregate purchase price of $250.00 in the Offering.

(b) In addition to the other restrictions and limitations set forth herein, the maximum amount of Common Stock which any Person together with any Associate or group of Persons acting in concert may, directly or indirectly, subscribe for or purchase in the Offering (including without limitation the Subscription Offering and/or Community Offering), shall not exceed five percent (5%) of the total shares of Common Stock sold in the Offering, except that the ESOP may purchase ten percent (10%) of the total shares of Common Stock issued in the Offering as set forth in Section 3(c). The limit set forth in this section shall not be construed to increase any other purchase limit provided herein. Purchases of shares of Common Stock in the Offering by any Person shall not exceed five percent (5%) of the total shares of Common Stock sold in the Offering irrespective of the different capacities in which such person may have received Subscription Rights under this Plan.

(c) For purposes of the foregoing limitations and the determination of Subscription Rights, (i) Directors, Officers, and Employees shall not be deemed to be Associates or a group acting in concert solely as a result of their capacities as such, (ii) shares purchased by the ESOP or other Tax-Qualified Employee Stock Benefit Plans or Non Tax-Qualified Employee Stock Benefit Plans shall not be attributable to the individual trustees, beneficiaries or participants of any such plan for purposes of determining compliance with the limitations set forth in this section, and (iii) shares of Common Stock purchased by any plan participant in a Tax-Qualified Employee Stock Benefit Plan using funds therein pursuant to the exercise of Subscription Rights granted to such plan participant in his individual capacity as an Eligible Member or Director or Officer or Employee and/or purchases by such plan participant in the Community Offering shall not be deemed to be purchases by the ESOP or other Tax-Qualified Employee Stock Benefit Plans for purposes of calculating the maximum amount of Common Stock that the ESOP and other Tax-Qualified Employee Stock Benefit Plans may purchase.

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(d) The Company may increase or decrease any of the purchase limitations set forth herein at any time; provided that in no event shall the maximum purchase limitation applicable to Eligible Members be less than the maximum purchase limitation percentage applicable to any other class of subscribers or purchasers in the Offering. In the event that either an individual or aggregate purchase limitation is increased after commencement of the Offering, any Person who ordered the maximum number of shares of Common Stock shall be permitted to purchase an additional number of shares such that such Person may subscribe for or order the then maximum number of shares permitted to be subscribed for by such Person, subject to the rights and preferences of any person who has priority rights to purchase shares of Common Stock in the Offering. In the event that either an individual or the aggregate purchase limitation is decreased after commencement of the Offering, the orders of any Person who subscribed for the maximum number of shares of Common Stock shall be decreased by the minimum amount necessary so that such Person shall be in compliance with the then maximum number of shares permitted to be subscribed for or ordered by such Person.

(e) Each Person who purchases Common Stock in the Offering shall be deemed to confirm that such purchase does not conflict with the purchase limitations under this Plan or otherwise imposed by law. The Company shall have the right to take any action as it may, in its sole discretion, deem necessary, appropriate or advisable in order to monitor and enforce the terms, conditions, limitations and restrictions contained in this section and elsewhere in this Plan and the terms, conditions and representations contained in the Order Form, including, but not limited to, the absolute right of HoldCo to reject, limit or revoke acceptance of any order and to delay, terminate or refuse to consummate any sale of Common Stock which it believes might violate, or is designed to, or is any part of a plan to, evade or circumvent such terms, conditions, limitations, restrictions and representations. Any such action shall be final, conclusive and binding on all Persons and HoldCo and the Company shall be free from any liability to any Person on account of any such action.

8.  TIMING OF THE OFFERINGS, MANNER OF PURCHASING COMMON STOCK AND ORDER FORMS.

(a) The exact timing of the commencement of the Offering shall be determined by HoldCo in consultation with any financial or advisory or investment banking firm retained by it in connection with the Offering. HoldCo may consider a number of factors in determining the exact timing of the commencement of the Offering, including, but not limited to, its current and projected future earnings, local and national economic conditions and the prevailing market for stocks in general and stocks of insurance companies in particular. HoldCo shall have the right to withdraw, terminate, suspend, delay, revoke or modify the Offering at any time and from time to time, as it in its sole discretion may determine, without liability to any Person, subject to any necessary regulatory approval or concurrence.

(b) HoldCo shall have the absolute right, in its sole discretion and without liability to any Person, to reject any Order Form, including, but not limited to, any Order Form that is (i) improperly completed or executed, (ii) not timely received, (iii) not accompanied by the proper payment, or (iv) submitted by a Person whose representations HoldCo believes to be false or who it otherwise believes, either alone, or acting in concert with others, is violating, evading or circumventing, or intends to violate, evade or circumvent, the terms and conditions of this Plan. HoldCo may, but will not be required to, waive any irregularity on any Order Form or may require the submission of corrected Order Forms or the remittance of full payment for shares of Common Stock by such date as they may specify. The interpretation of HoldCo of the terms and conditions of the Order Forms shall be final and conclusive. Once HoldCo receives an Order Form, the order shall be deemed placed and will be irrevocable.

(c) HoldCo shall make reasonable efforts to comply with the securities laws of all jurisdictions in the United States in which Persons entitled to subscribe reside. However, HoldCo has no obligation to offer or sell shares to any Person under the Plan if such Person resides in a foreign country or in a jurisdiction of the United States with respect to which (i) there are few Persons otherwise eligible to subscribe for shares under this Plan who reside in such jurisdiction, (ii) the granting of Subscription Rights or the offer or sale of shares of Common Stock to such Persons would require HoldCo or its Directors, Officers or Employees, under the laws of such jurisdiction, to register as a broker or dealer, salesman or selling agent or to register or otherwise qualify the Common Stock for sale in such jurisdiction, or HoldCo would be required to qualify as a foreign corporation or file a consent to service of process in

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such jurisdiction, or (iii) such registration or qualification in the judgment of HoldCo would be impracticable or unduly burdensome for reasons of cost or otherwise.

9.  PAYMENT FOR COMMON STOCK.

(a) Payment for shares of Common Stock ordered by Persons in the Offering shall be equal to the Purchase Price per share multiplied by the number of shares which are being ordered. Such payment shall be made by check or money order at the time the Order Form is delivered to HoldCo.

(b) Consistent with applicable laws and regulations, payment for shares of Common Stock ordered by Tax-Qualified or Non-Tax-Qualified Employee Stock Benefit Plans may be made with funds contributed or loaned by HoldCo or the Company and/or funds obtained pursuant to a loan from an unrelated financial institution pursuant to a loan commitment which is in force from the time that any such plan submits an Order Form until the closing of the transactions contemplated hereby.

(c) Each share of Common Stock issued in the Offering shall be non-assessable upon payment in full of the Purchase Price.

10.  CONDITIONS TO THE OFFERINGS.

Consummation of the Offering is subject to (i) the receipt of all required federal and state approvals for the issuance of Common Stock in the Offering, (ii) approval of the Plan by the members of PMMHC as provided in Section 2105 of the Pennsylvania BCL, and (iii) the sale in the Offering of such minimum number of shares of Common Stock within the Valuation Range as may be determined by the Board of Directors of PMMHC and HoldCo.

11.  SPECIAL MEETING OF MEMBERS.

Following the approval of the Plan by the PID, a special meeting of the members of PMMHC will be held by PMMHC in accordance with the Bylaws of PMMHC and applicable Pennsylvania law. The Board of Directors of PMMHC shall establish a record date for members entitled to vote at the special meeting in accordance with the Bylaws of PMMHC and applicable Pennsylvania law (the “Voting Record Date”). Notice of the special meeting will be given by PMMHC to members eligible to vote as of the Voting Record Date by mailing (i) a notice of the special meeting, (ii) a proxy statement, (iii) a form of proxy by which members may vote in favor of or against the Conversion, and (iv) a copy of this Plan as approved by the PID, to the address of each member eligible to vote as such address appears on the records of PMMHC on the Voting Record Date.

Pursuant to Section 2105 of the Pennsylvania BCL and the Bylaws of PMMHC, the Plan must be approved by the affirmative vote of at least a majority of the votes entitled to be cast at the special meeting. Voting may be in person or by proxy. PMMHC shall be promptly notified of the vote of the members taken at the special meeting.

12.  ARTICLES OF INCORPORATION.

As part of the Conversion, the existing Articles of Incorporation of PMMHC will be amended and restated to authorize PMMHC to operate as a stock corporation. By approving this Plan, the members of PMMHC will also be requested to approve the amendment and restatement of PMMHC’s existing Articles of Incorporation. A form of the amended and restated Articles of Incorporation is attached hereto as “EXHIBIT A” Prior to completion of the Conversion, the form of amended and restated Articles of Incorporation may be revised in accordance with the provisions and limitations for amending this Plan under Section 17 hereof. The amendment and restatement of the existing Articles of Incorporation of PMMHC shall occur on the Effective Date.

13.  REQUIREMENT FOLLOWING OFFERING FOR REGISTRATION, MARKET MAKING AND STOCK EXCHANGE LISTING.

HoldCo shall register the Common Stock pursuant to the Securities Exchange Act of 1934, as amended. HoldCo shall use its best efforts to (i) encourage and assist a market maker to establish and maintain a market for that class of stock and (ii) list that class of stock on a national or regional securities exchange or to have quotations for that class of stock disseminated on the Nasdaq Stock Market.

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14.  RESTRICTIONS ON TRANSFER OF COMMON STOCK.

(a) All shares of the Common Stock which are purchased in the Offering by Persons other than Insiders shall be transferable without restriction. Shares of Common Stock purchased by Insiders in the Offering shall be subject to the restriction that such shares shall not be sold or otherwise disposed of for value for a period of six months following the date of purchase, except for any disposition of such shares following the death of the Insider or Associate. The shares of Common Stock issued by HoldCo to Insiders and their Associates shall bear the following legend giving appropriate notice of such six-month restriction:

The shares represented by this Certificate may not be sold by the registered holder hereof for a period of six months from the date of the issuance printed hereon, except in the event of the death of the registered holder. This restrictive legend shall be deemed null and void after six months from the date of this Certificate.

(b) In addition, HoldCo shall give appropriate instructions to the transfer agent for its Common Stock with respect to the applicable restrictions relating to the transfer of restricted stock. Any shares issued at a later date as a stock dividend, stock split or otherwise with respect to any such restricted stock shall be subject to the same holding period restrictions as may then be applicable to such restricted stock.

(c) The foregoing restriction on transfer shall be in addition to any restrictions on transfer that may be imposed by federal and state securities laws.

15.  STOCK COMPENSATION PLANS.

Subject to the approval of the adoption of a Tax-Qualified Employee Stock Benefit Plan as required by the Commissioner’s 1998 Order and the further approval of the appropriate Board of Directors, the Company plans to adopt one or more Tax-Qualified Employee Stock Benefit Plans in connection with the Offering, including, without limitation, the ESOP. Subsequent to the Offering, subject to Pennsylvania Insurance Commissioner approval and the further approval of the appropriate Board of Directors, the Company may adopt Non-Tax Qualified Employee Stock Benefit Plans, including without limitation, Option Plans and MRPs; provided however, that, any such plan shall be implemented in accordance with applicable laws and regulations. Subject to Pennsylvania Insurance Commissioner approval and the further approval of the appropriate Board of Directors, this Plan authorizes the grant and issuance by HoldCo of awards of Common Stock pursuant to an MRP or Option Plan in accordance with any applicable laws and regulations. In no event shall the aggregate amount of shares issued under such Option Plans and MRPs exceed 14% of the outstanding shares of Common Stock of HoldCo as of the close of the Offering.

16.  VOTING RIGHTS.

After consummation of the Conversion, exclusive voting rights with respect to PMMHC shall be vested in HoldCo, which will hold of all of PMMHC’s outstanding capital stock.

17.  AMENDMENT OR TERMINATION.

This Plan may be substantively amended at any time by the Board of Directors of PMMHC as a result of comments from regulatory authorities or otherwise. This Plan may be terminated at any time by the Board of Directors of PMMHC.

18.  INTERPRETATION.

References herein to provisions of federal and state law shall in all cases be deemed to refer to the provisions of the same which were in effect at the time of adoption of this Plan by the Board of Directors of PMMHC and any subsequent amendments to such provisions. All interpretations of this Plan and application of its provisions to particular circumstances by a majority of the Board of Directors of PMMHC shall be final.

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EXHIBIT B

AMENDED AND RESTATED ARTICLES OF INCORPORATION

AMENDED AND RESTATED ARTICLES OF INCORPORATION
OF PMMHC CORP.

FIRST.  The name of the Corporation is PMMHC Corp.

SECOND.  The location and post office address of the registered office of the Corporation in this Commonwealth is 72 North Franklin Street, Wilkes-Barre, Pennsylvania 18773-0016.

THIRD.  The Corporation is incorporated under the provisions of the Pennsylvania Business Corporation Law of 1988 (“PABCL”). The purpose of the Corporation is, and it shall have unlimited power, to engage in and to perform any lawful act concerning, any and all lawful business for which company may be incorporated under the PABCL.

FOURTH.  The term of the Corporation’s existence is perpetual.

FIFTH.  The aggregate number of shares of capital stock which the company shall have authority to issue is One Million (1,000,000) shares of common stock, with a par value of $0.01 per share. Any or all classes of shares of the Corporation, or any part thereof, may be represented by uncertificated shares to the extent determined by the Board of Directors, except that shares represented by a certificate that is issued and outstanding shall be represented thereby until the certificate is surrendered to the Corporation.

SIXTH.  The management, control and government of the Corporation shall be vested in a board of directors consisting of not less than three (3) nor more than fifteen (15) members in number, as fixed by the board of directors of the Corporation from time to time. The directors of the Corporation shall be divided into three classes: Class I, Class II and Class III. Each Class shall be as nearly equal in number as possible. If the number of Class I, Class II or Class III directors is fixed for any term of office, it shall not be increased during that term, except by a majority vote of the board of directors. The term of office of the initial Class I directors shall expire at the annual election of directors by the shareholders of the Corporation in 2010; the term of office of the initial Class II directors shall expire at the annual election of directors by the shareholders of the Corporation in 2011; and the term of office of the initial Class III directors shall expire at the annual election of directors by the shareholders of the Corporation in 2012. After the initial term of each Class, the term of office of each Class shall be three (3) years, so that the term of office of one class of directors shall expire each year when their respective successors have been duly elected by the shareholders and qualified. At each annual election by the shareholders of the Corporation, the directors chosen to succeed those whose terms then expire shall be identified as being of the same class as the directors they succeed.

SEVENTH.  The Corporation reserves the right to amend, alter, change or repeal any provision contained in its Articles of Incorporation in the manner now or hereafter prescribed by statute and all rights conferred upon shareholders and directors herein are hereby granted.

IN TESTIMONY WHEREOF, a duly authorized officer of the company has signed these amended and restated Articles of Incorporation this      day of          , 2009.

Douglas A. Gaudet, President and Chief

Executive Officer

[Penn Millers Mutual Holding Company]

A REQUEST THAT YOU VOTE

Dear Member:

As a follow-up to our recent mailing, this is to remind you that your vote is very important.

The Board of Directors of Penn Millers Mutual Holding Company has voted unanimously in favor of a plan to convert from a Pennsylvania mutual holding company to a Pennsylvania stock holding company. As part of this plan, we have formed Penn Millers Holding Corporation, which will become the parent holding company of Penn Millers Mutual, and Penn Millers Mutual will become the stock holding company of Penn Millers Insurance Company. We are converting Penn Millers Mutual so that we may obtain capital to support and grow our operations and so that members/policyholders, directors, officers and employees may purchase our stock and share in our success.

To accomplish the conversion, your participation is extremely important. On behalf of the Board, I ask that you help us meet our goal by casting your vote in favor of the plan of conversion and mailing your signed proxy card immediately in the enclosed [COLOR] postage-paid envelope marked “PROXY RETURN.” Should you choose to attend the special meeting of members and vote in person, you may do so by giving written notice of revocation to the Secretary of Penn Millers Mutual. If you have multiple policies at Penn Millers Insurance Company, you may receive more than one mailing. If you do receive more than one proxy card, please vote, sign and return each one.

If the plan of conversion is approved let me assure you that:

• Existing insurance coverage under your policy with Penn Millers Insurance Company will not undergo any change as a result of the conversion.

• Voting for approval of the plan will not obligate you to buy any shares of common stock.

If you have any questions after reading the enclosed material, please call our Stock Information Center at (888) 764-2743, Monday through Friday, between the hours of 10:00 a.m. and 4:00 p.m.

Sincerely,

Douglas A. Gaudet
President and Chief Executive Officer

PROXY REQUEST

WE NEED YOUR VOTE

Dear Member:

Your vote on our plan of conversion has not yet been received. Your vote is very important to us. Please vote, sign and mail the enclosed proxy card today.

Remember: Voting does not obligate you to buy shares of common stock. Your Board of Directors has approved the plan of conversion and urges you to vote in favor of the plan of conversion. Your existing insurance coverage under your policy will not undergo any change as a result of the conversion.

A postage-paid envelope is enclosed with the proxy card. If you have any questions, please call our conversion center at (877) 764-2743.

Sincerely,

Douglas A. Gaudet
President and Chief Executive Officer

Please vote today by returning all proxy cards received.