EX-99.1 2 a16-20633_7ex99d1.htm EX-99.1

Exhibit 99.1

This document is important and requires your immediate attention. If you are in any doubt as to how to deal with it, you should consult with your investment dealer, broker, lawyer or other professional advisors. This document does not constitute an offer or a solicitation to any person in any jurisdiction in which such offer or solicitation is unlawful. If you have questions, you may contact PWC Capital Inc.’s proxy solicitation and information agent, Kingsdale Shareholder Services, by telephone at 1-877-659-1819 (toll free in North America) or 1-416-867-2272 (collect outside North America) or by email at contactus@kingsdaleshareholder.com.

NOTICES OF MEETINGS OF HOLDERS OF

COMMON SHARES

CLASS B PREFERRED SHARES

SERIES C NOTES

PWC CAPITAL INC.

to be held on December 30, 2016

AND

MANAGEMENT INFORMATION CIRCULAR

with respect to, among other things, an amalgamation involving

PWC CAPITAL INC.

and

VERSABANK

The Board of Directors unanimously recommends that you vote

FOR

the Transaction

November 22, 2016

November 22, 2016

Dear PWC Securityholders:

The board of directors of PWC Capital Inc. (“PWC”) invites you to attend meetings of the holders (the “PWC Securityholders”) of common shares of PWC (the “PWC Common Shares”), Class B preferred shares of PWC (the “PWC Class B Preferred Shares”) and 9% Series C Notes of PWC maturing October 16, 2018 (the “PWC Series C Notes”, together with the PWC Common Shares and the PWC Class B Preferred Shares, the “PWC Securities”) to be held on December 30, 2016, at the offices of Stikeman Elliott LLP, 199 Bay Street, Commerce Court West, Suite 5300, Toronto, Ontario, Canada.

At the meetings, PWC Securityholders will be asked to consider and, if deemed advisable, to approve, as applicable, resolutions to effect certain transactions (collectively, the “Transaction”) which include, inter alia, the redemption of the issued and outstanding Class A preferred shares of PWC, the exchange of the PWC Class B Preferred Shares and PWC Series C Notes for PWC Common Shares (the “PWC Recapitalization”), the conversion of certain indebtedness owed by PWC into PWC Common Shares, and the amalgamation (the “Amalgamation”) of PWC and VersaBank (prior to the Amalgamation, “VersaBank”) following which the amalgamated entity will continue as “VersaBank” (following the Amalgamation, the “Bank”). After the Transaction is completed, holders of PWC Common Shares, PWC Class B Preferred Shares and PWC Series C Notes will become Bank common shareholders.

We are looking forward to the opportunities that the Transaction will provide once completed, and we are enthusiastic to be in a position to turn our full attention to deliver on the business plans and growth initiatives of one consolidated enterprise. As we discuss in greater detail in the accompanying management information circular (the “PWC Circular”), it is anticipated that the Transaction will benefit, PWC, you as its securityholder, and the Bank, in a variety of significant respects, including (among others):

· Enhanced value for PWC Securityholders beyond PWC’s holding of VersaBank common shares;

· Improved financial position;

· Direct participation by PWC Securityholders in future growth of the Bank;

· Simplified corporate and capital structure;

· Improved liquidity; and

· Improved access to capital markets.

The accompanying notices of meetings, the PWC Circular and Joint Disclosure Booklet (the “Joint Disclosure Booklet”) contain a detailed description of the Transaction and set forth the actions to be taken at each of the meetings. You should carefully consider all of the information in the notices of meetings, the PWC Circular and the Joint Disclosure Booklet and consult your financial, legal or other professional advisors if you require assistance.

The board of directors of PWC (the “PWC Board”), after consultation with its financial and legal advisors, and on the unanimous recommendation of the independent committee of the PWC Board (the “PWC Independent Committee”), has determined that the Transaction is in the best interests of PWC and fair to PWC Securityholders, and unanimously recommends that holders of PWC Common Shares, PWC Class B Preferred Shares and PWC Series C Notes vote FOR their respective resolutions in connection with the Transaction. The determination of the PWC Independent Committee and the PWC Board is based on various factors described more fully in the accompanying PWC Circular and the Joint Disclosure Booklet.

We are asking you to take two actions.

First, your vote is important regardless of how many PWC Securities you own. If you are a registered holder of PWC Securities (a “Registered PWC Securityholder”), to vote your PWC Common Shares, PWC Class B Preferred Shares or PWC Series C Notes at your applicable meeting, you can either return a duly completed and executed form of proxy to the Toronto office of Computershare Investor Services Inc. (or, in the case of holders of PWC Series C Notes, to Computershare Trust Company of Canada) by hand or by mail at 100 University Avenue, 8th Floor, Toronto, Ontario, M5J 2Y1, Attention: Proxy Department or you can vote by telephone, on the Internet or by fax, in each case in accordance with the enclosed instructions, by no later than 10:30 a.m. (Toronto time) on December 28, 2016 (or no later than 48 hours, excluding Saturday, Sundays and holidays, before any reconvened meeting if the applicable meeting is adjourned or postponed). If you hold PWC Securities through a broker, investment dealer, bank, trust company or other intermediary (a “Beneficial PWC Securityholder”), you should follow the instructions provided by your intermediary to ensure your vote is counted at the applicable meetings. The time limit for deposit of proxies may be waived or extended by the chair of the applicable meeting at his or her discretion, without notice.

Second, if the resolutions at each meeting are passed and the Transaction is approved and completed, before the Bank Common Shares to which you are entitled can be sent to you, the depositary, Computershare Investor Services Inc., will need to receive the enclosed letter(s) of transmittal completed by you, if you are a Registered PWC Securityholder, or by your broker, investment dealer, bank, trust company or other intermediary, if you are a Beneficial PWC Securityholder. If you are a Beneficial PWC Securityholder, you must ensure that your intermediary completes the necessary transmittal documents to ensure that you receive the Bank Common Shares to which you are entitled if the Transaction is completed.

To be effective, the Transaction must be approved by resolutions passed at the meetings by:

(i) at least 662/3% of the votes cast by holders of PWC Common Shares present in person or represented by proxy at the meeting of holders of PWC Common Shares;

(ii) a majority of the votes cast by the holders of PWC Common Shares present in person or represented by proxy at the meeting of holders of PWC Common Shares other than those required to be excluded in determining such approval pursuant to Multilateral Instrument 61-101 — Protection of Minority Security Holders in Special Transactions and the rules and policies of the Toronto Stock Exchange (the “TSX”);

(iii) at least 662/3% of the votes cast by holders of PWC Class B Preferred Shares present in person or represented by proxy at the meeting of holders of PWC Class B Preferred Shares; and

(iv) at least 662/3% of the votes cast by holders of PWC Series C Notes present in person or represented by proxy at the meeting of holders of PWC Series C Notes.

The Transaction is also subject to certain other conditions, including the receipt of the approval from the Minister of Finance (Canada). The Transaction is also subject to other customary closing conditions, including the approval of the TSX.

If the necessary approvals, including the approval of the PWC Securityholders at the meetings and all required regulatory approvals are obtained, it is currently anticipated that the Transaction will be completed in the first quarter of calendar 2017. As a PWC Securityholder, you will receive Bank Common Shares for your PWC Securities soon afterward if the depositary has received your duly completed letter(s) of transmittal.

iii

If you have any questions or need assistance in your consideration of the Transaction or with the completion and delivery of your proxy, please contact PWC’s proxy solicitation and information agent, Kingsdale Shareholder Services, at 1-877-659-1819 (toll free in North America) or 1-416-867-2272 (collect outside North America) or by email at contactus@kingsdaleshareholder.com. If you have any questions about submitting your PWC Securities, including, with respect to completing the enclosed letter(s) of transmittal, please contact Computershare Investor Services Inc., who is acting as depositary under the Transaction, toll free at 1-800-564-6253 or outside North America at 1-514-982-7555 or by email at corporateactions@computershare.com.

On behalf of PWC, I would like to thank all of our PWC Securityholders for their continuing support.

	Yours very truly,

	(Signed) “Tel Matrundola”

	Tel Matrundola
	Chair of the Board of Directors

PWC CAPITAL INC.

NOTICE OF SPECIAL MEETING OF HOLDERS OF COMMON SHARES

NOTICE IS HEREBY GIVEN that a special meeting (the “PWC Common Shareholders Meeting”) of the holders (“PWC Common Shareholders”) of common shares (the “PWC Common Shares”) of PWC Capital Inc. (“PWC”) will be held at 9:00 a.m. (Toronto time) on December 30, 2016, at the offices of Stikeman Elliott LLP, 199 Bay Street, Commerce Court West, Suite 5300, Toronto, Ontario, Canada, for the following purposes:

1. to consider, and, if thought advisable to pass, with or without variation, a special resolution (the “PWC Common Shareholders Resolution”), the full text of which is set out in Appendix B to the accompanying management information circular (the “PWC Circular”) to approve: (i) the redemption of the issued and outstanding Class A preferred shares of PWC for a cash payment in accordance with their terms, (ii) amendments to the articles of PWC to effect the change of the outstanding Class B preferred shares of PWC into PWC Common Shares, (iii) amendments to the trust indenture dated as of October 13, 1998 between PWC and Computershare Trust Company of Canada (as successor to Montreal Trust Company of Canada), as amended, to effect the exchange of the outstanding 9% Series C Notes of PWC maturing October 16, 2018 into PWC Common Shares, (iv) the conversion of all of the indebtedness owed by PWC to 340268 Ontario Limited into PWC Common Shares, (v) the exchange of the outstanding deferred share units of PWC into PWC Common Shares, (vi) the issuances of PWC Common Shares in connection with the foregoing, and (vii) the amalgamation (the “Amalgamation”) of PWC with VersaBank (prior to the Amalgamation, “VersaBank”) pursuant to Section 228 of the Bank Act (Canada) pursuant to which PWC Common Shares outstanding immediately prior to the Amalgamation will be converted into common shares of the amalgamated entity, “VersaBank” (following the Amalgamation, the “Bank”); and

2. to transact such other business as may properly come before the PWC Common Shareholders Meeting or any postponement or adjournment thereof.

Specific details of the matters proposed to be put before the PWC Common Shareholders Meeting are set forth in the PWC Circular and the Joint Disclosure Booklet (the “Joint Disclosure Booklet”) which accompany and are deemed to form part of this notice of special meeting.

PWC Common Shareholders are entitled to vote at the PWC Common Shareholders Meeting in person or by proxy. Each PWC Common Share entitles the holder thereof to one vote at the PWC Common Shareholders Meeting. The board of directors of PWC (the “PWC Board”) has fixed November 23, 2016 (the “Record Date”), as the record date for determining the PWC Common Shareholders who are entitled to receive notice of and vote at the PWC Common Shareholders Meeting. Only the PWC Common Shareholders whose names have been entered in the registers of PWC as at the close of business on the Record Date will be entitled to receive notice of and vote at the PWC Common Shareholders Meeting.

If you are a registered PWC Common Shareholder, to ensure that your vote is recorded, please return the enclosed form of proxy in the envelope provided for that purpose, properly completed and duly signed, to Computershare Investor Services Inc. in accordance with the instructions provided in the proxy, by no later than 10:30 a.m. (Toronto time) on December 28, 2016 (or no later than 48 hours, excluding Saturday, Sundays and holidays, before any reconvened meeting if the PWC Common Shareholders Meeting is adjourned or postponed), whether or not you plan to attend the PWC Common Shareholders Meeting. The time limit for deposit of proxies may be waived or extended by the chair of the PWC Common Shareholders Meeting at his or her discretion, without notice. The chair of the PWC Common Shareholders Meeting will have the authority to determine the procedure to be followed at such meeting.

If you hold your PWC Common Shares through a broker, investment dealer, bank, trust company or other intermediary, you should follow the instructions provided by your intermediary to

ensure your vote is counted at the PWC Common Shareholders Meeting and should arrange for your intermediary to complete the necessary transmittal documents to ensure that you receive the appropriate number of Bank common shares for your PWC Common Shares if the Amalgamation is completed.

The voting rights attached to the PWC Common Shares represented by a proxy in the enclosed form of proxy will be voted in accordance with the instructions indicated thereon. If no instructions are provided in proxies given in favour of management nominees, the voting rights attached to such PWC Common Shares will be voted FOR the PWC Common Shareholders Resolution.

A registered PWC Common Shareholder may revoke a proxy:

(a) by an instrument in writing executed by the PWC Common Shareholders or by an attorney in writing or, if the PWC Common Shareholder is a corporation, under its corporate seal or by an officer or attorney thereof duly authorized, and deposited:

(i) at the registered office of PWC at any time up to and including the last business day preceding the date of the PWC Common Shareholders Meeting or any postponement or adjournment thereof; or

(ii) with the chair of the PWC Common Shareholders Meeting on December 30, 2016 or any postponement or adjournment of the PWC Common Shareholders Meeting; or

(b) in any other manner permitted by law.

A beneficial PWC Common Shareholder who has given voting instructions to a broker or other intermediary may revoke such voting instructions by giving written notice to the intermediary. However, a broker or other intermediary may be unable to take any action on the revocation if such revocation is not provided sufficiently in advance of the PWC Common Shareholders Meeting or any adjournment or postponement thereof.

Registered holders of PWC Common Shares are entitled to dissent from the PWC Common Shareholders Resolution and to be paid an amount equal to the fair value of their PWC Common Shares. This dissent right, and the procedures for its exercise, are described in the PWC Circular under “Dissent Rights of Securityholders”. Failure to comply strictly with the dissent procedures described in this PWC Circular may result in the loss or unavailability of any right to dissent.

If you have any questions or need assistance in your consideration of the PWC Common Shareholders Resolution or with the completion and delivery of your proxy, please contact PWC’s proxy solicitation and information agent, Kingsdale Shareholder Services, at 1-877-659-1819 (toll free in North America) or 1-416-867-2272 (collect outside North America) or by email at contactus@kingsdaleshareholder.com. If you have any questions about submitting your PWC Common Shares, including, with respect to completing the enclosed letter(s) of transmittal, please contact Computershare Investor Services Inc., who is acting as depositary under the Transaction, toll free at 1-800-564-6253 or outside North America at 1-514-982-7555 or by email at corporateactions@computershare.com.

DATED this 22nd day of November, 2016.

	BY ORDER OF THE BOARD OF DIRECTORS

	(Signed) “Tel Matrundola”

	Tel Matrundola
	Chair of the Board of Directors

PWC CAPITAL INC.

NOTICE OF SPECIAL MEETING OF HOLDERS OF CLASS B PREFERRED SHARES

NOTICE IS HEREBY GIVEN that a special meeting (the “PWC Class B Preferred Shareholders Meeting”) of the holders (“PWC Class B Preferred Shareholder”) of Class B Preferred Shares (the “PWC Class B Preferred Shares”) of PWC Capital Inc. (“PWC”) will be held at 9:45 a.m. (Toronto time) on December 30, 2016, at the offices of Stikeman Elliott LLP, 199 Bay Street, Commerce Court West, Suite 5300, Toronto, Ontario, Canada, for the following purposes:

1. to consider, and, if thought advisable to pass, with or without variation, a special resolution (the “PWC Class B Preferred Shareholders Resolution”), the full text of which is set out in Appendix C to the accompanying management information circular (the “PWC Circular”) to approve amendments to the articles of PWC to effect the change of the outstanding PWC Class B Preferred Shares into common shares of PWC; and

2. to transact such other business as may properly come before the PWC Class B Preferred Shareholders Meeting or any postponement or adjournment thereof.

Specific details of the matters proposed to be put before the PWC Class B Preferred Shareholders Meeting are set forth in the PWC Circular and the Joint Disclosure Booklet (the “Joint Disclosure Booklet”) which accompany and are deemed to form part of this notice of special meeting.

PWC Class B Preferred Shareholders are entitled to vote at the PWC Class B Preferred Shareholders Meeting in person or by proxy. Each PWC Class B Preferred Share entitles the holder thereof to one vote at the PWC Class B Preferred Shareholders Meeting. The board of directors of PWC (the “PWC Board”) has fixed November 23, 2016 (the “Record Date”), as the record date for determining the PWC Class B Preferred Shareholders who are entitled to receive notice of and vote at the PWC Class B Preferred Shareholders Meeting. Only the PWC Class B Preferred Shareholders whose names have been entered in the registers of PWC as at the close of business on the Record Date will be entitled to receive notice of and vote at the PWC Class B Preferred Shareholders Meeting.

If you are a registered PWC Class B Preferred Shareholder, to ensure that your vote is recorded, please return the enclosed form of proxy in the envelope provided for that purpose, properly completed and duly signed, to Computershare Investor Services Inc. in accordance with the instructions provided in the proxy, by no later than 10:30 a.m. (Toronto time) on December 28, 2016 (or no later than 48 hours, excluding Saturday, Sundays and holidays, before any reconvened meeting if the PWC Class B Preferred Shareholders Meeting is adjourned or postponed), whether or not you plan to attend the PWC Class B Preferred Shareholders Meeting. The time limit for deposit of proxies may be waived or extended by the chair of the PWC Class B Preferred Shareholders Meeting at his or her discretion, without notice. The chair of the PWC Class B Preferred Shareholders Meeting will have the authority to determine the procedure to be followed at such meeting.

If you hold your PWC Class B Preferred Shares through a broker, investment dealer, bank, trust company or other intermediary, you should follow the instructions provided by your intermediary to ensure your vote is counted at the PWC Class B Preferred Shareholders Meeting and should arrange for your intermediary to complete the necessary transmittal documents to ensure that you receive the appropriate consideration you are entitled to.

The voting rights attached to the PWC Class B Preferred Shares represented by a proxy in the enclosed form of proxy will be voted in accordance with the instructions indicated thereon. If no instructions are provided in proxies given in favour of management nominees, the voting rights attached to such PWC Class B Preferred Shares will be voted FOR the PWC Class B Preferred Shareholders Resolution.

vii

A registered holder of PWC Class B Preferred Shares may revoke a proxy:

(a) by an instrument in writing executed by the PWC Securityholder or by an attorney in writing or, if the PWC Securityholder is a corporation, under its corporate seal or by an officer or attorney thereof duly authorized, and deposited:

(i) at the registered office of PWC at any time up to and including the last business day preceding the date of the PWC Class B Preferred Shareholders Meeting or any postponement or adjournment thereof; or

(ii) with the chair of the PWC Class B Preferred Shareholders Meeting on December 30, 2016 or any postponement or adjournment of the PWC Class B Preferred Shareholders Meeting; or

(b) in any other manner permitted by law.

A beneficial PWC Class B Preferred Shareholder who has given voting instructions to a broker or other intermediary may revoke such voting instructions by giving written notice to the intermediary. However, a broker or other intermediary may be unable to take any action on the revocation if such revocation is not provided sufficiently in advance of the PWC Class B Preferred Shareholders Meeting or any adjournment or postponement thereof.

Registered holders of PWC Class B Preferred Shares are entitled to dissent from the PWC Class B Preferred Shareholders Resolution and to be paid an amount equal to the fair value of their PWC Class B Preferred Shares. This dissent right, and the procedures for its exercise, are described in the PWC Circular under “Dissent Rights of Securityholders”. Failure to comply strictly with the dissent procedures described in this PWC Circular may result in the loss or unavailability of any right to dissent.

If you have any questions or need assistance in your consideration of the PWC Class B Preferred Shareholders Resolution or with the completion and delivery of your proxy, please contact PWC’s proxy solicitation and information agent, Kingsdale Shareholder Services, at 1-877-659-1819 (toll free in North America) or 1-416-867-2272 (collect outside North America) or by email at contactus@kingsdaleshareholder.com. If you have any questions about submitting your PWC Class B Preferred Shares, including, with respect to completing the enclosed letter(s) of transmittal, please contact Computershare Investor Services Inc., who is acting as depositary under the Transaction, toll free at 1-800-564-6253 or outside North America at 1-514-982-7555 or by email at corporateactions@computershare.com.

DATED this 22nd day of November, 2016.

	BY ORDER OF THE BOARD OF DIRECTORS

	(Signed) “Tel Matrundola”

	Tel Matrundola
	Chair of the Board of Directors

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PWC CAPITAL INC.

NOTICE OF MEETING OF HOLDERS OF SERIES C NOTES

NOTICE IS HEREBY GIVEN that a meeting (the “PWC Series C Noteholders Meeting”) of the holders (“PWC Series C Noteholders”) of 9% Series C Notes of PWC Capital Inc. (“PWC”) maturing October 16, 2018 (the “PWC Series C Notes”) will be held at 10:30 a.m. (Toronto time) on December 30, 2016, at the offices of Stikeman Elliott LLP, 199 Bay Street, Commerce Court West, Suite 5300, Toronto, Ontario, Canada, for the following purposes:

1. to consider, and, if thought advisable to pass, with or without variation, an extraordinary resolution (the “PWC Series C Noteholders Resolution”), the full text of which is set out in Appendix D to the accompanying management information circular (the “PWC Circular”) to approve: (i) the waiver by the holders of PWC Series C Notes of certain interest payments on such notes, and (ii) amendments to the trust indenture (the “Series C Indenture”) dated as of October 13, 1998 between PWC and Computershare Trust Company of Canada (as successor to Montreal Trust Company of Canada), as amended, to effect the exchange of the outstanding PWC Series C Notes into common shares of PWC; and

2. to transact such other business as may properly come before the PWC Series C Noteholders Meeting or any postponement or adjournment thereof.

Specific details of the matters proposed to be put before the PWC Series C Noteholders Meeting are set forth in the PWC Circular and the Joint Disclosure Booklet (the “Joint Disclosure Booklet”) which accompany and are deemed to form part of this notice of meeting.

The Series C Indenture permits amendments thereto by written resolutions in lieu of meetings of PWC Series C Noteholders, including in the case of the PWC Series C Noteholder Resolution, by instrument in writing signed by PWC Series C Noteholders holding not less than 662/3% in aggregate principal amount of the PWC Series C Notes outstanding. In accordance with applicable securities laws, PWC would be required to publicly announce any such written approval of the PWC Series C Noteholders Resolution, in which event PWC would cancel the PWC Series C Noteholders Meeting.

PWC Series C Noteholders are entitled to vote at the PWC Series C Noteholders Meeting in person or by proxy. PWC Series C Noteholders will be entitled to one vote for each $1,000 principal amount of PWC Series C Notes held by such noteholder. The board of directors of PWC (the “PWC Board”) has fixed November 23, 2016 (the “Record Date”), as the record date for determining the PWC Series C Noteholders who are entitled to receive notice of and vote at the PWC Series C Noteholders Meeting. Only the PWC Series C Noteholders whose names have been entered in the registers of PWC as at the close of business on the Record Date will be entitled to receive notice of and vote at the PWC Series C Noteholders Meeting. Computershare Trust Company of Canada, the trustee under the Series C Indenture, will nominate, in accordance with the terms of such indenture, a chairperson for the PWC Series C Noteholders Meeting.

If you are a registered PWC Series C Noteholder, to ensure that your vote is recorded, please return the enclosed form of proxy in the envelope provided for that purpose, properly completed and duly signed, to Computershare Trust Company of Canada in accordance with the instructions provided in the proxy, by no later than 10:30 a.m. (Toronto time) on December 28, 2016 (or no later than 48 hours, excluding Saturday, Sundays and holidays, before any reconvened meeting if the PWC Series C Noteholders Meeting is adjourned or postponed), whether or not you plan to attend the PWC Series C Noteholders Meeting. The time limit for deposit of proxies may be waived or extended by the chair of the PWC Series C Noteholders Meeting at his or her discretion, without notice. The chair of the PWC Series C Noteholders Meeting will have the authority to determine the procedure to be followed at such meeting.

If you hold your PWC Series C Notes through a broker, investment dealer, bank, trust company or other intermediary, you should follow the instructions provided by your intermediary to ensure your vote is counted at the PWC Series C Noteholders Meeting and should arrange for your intermediary to

complete the necessary transmittal documents to ensure that you receive the consideration you are entitled to.

The voting rights attached to the PWC Series C Notes represented by a proxy in the enclosed form of proxy will be voted in accordance with the instructions indicated thereon. If no instructions are provided in proxies given in favour of management nominees, the voting rights attached to such PWC Series C Notes will be voted FOR the PWC Series C Noteholders Resolution.

A registered holder of PWC Series C Notes may revoke a proxy:

(a) by an instrument in writing executed by the PWC Series C Noteholder or by an attorney in writing or, if the PWC Series C Noteholder is a corporation, under its corporate seal or by an officer or attorney thereof duly authorized, and deposited:

(i) with Computershare Trust Company of Canada located at at 8th Floor, 100 University Avenue, Toronto, Ontario, M5J 2Y1, at any time up to and including the last business day preceding the date of the PWC Series C Noteholders Meeting or any postponement or adjournment thereof; or

(ii) with the chair of the PWC Series C Noteholders Meeting on December 30, 2016 or any postponement or adjournment of the PWC Series C Noteholders Meeting; or

(b) in any other manner permitted by law.

A beneficial PWC Series C Noteholder who has given voting instructions to a broker or other intermediary may revoke such voting instructions by giving written notice to the intermediary. However, a broker or other intermediary may be unable to take any action on the revocation if such revocation is not provided sufficiently in advance of the PWC Series C Noteholders Meeting or any adjournment or postponement thereof.

Registered holders of PWC Series C Notes are entitled to dissent from the PWC Series C Noteholders Resolution and to be paid an amount equal to the fair value of their PWC Series C Notes. This dissent right, and the procedures for its exercise, are described in the PWC Circular under “Dissent Rights of Securityholders”. Failure to comply strictly with the dissent procedures described in this PWC Circular may result in the loss or unavailability of any right to dissent.

If you have any questions or need assistance in your consideration of the PWC Series C Noteholders Resolution or with the completion and delivery of your proxy, please contact PWC’s proxy solicitation and information agent, Kingsdale Shareholder Services, at 1-877-659-1819 (toll free in North America) or 1-416-867-2272 (collect outside North America) or by email at contactus@kingsdaleshareholder.com. If you have any questions about submitting your PWC Series C Notes, including, with respect to completing the enclosed letter(s) of transmittal, please contact Computershare Investor Services Inc., who is acting as depositary, toll free at 1-800-564-6253 or outside North America at 1-514-982-7555 or by email at corporateactions@computershare.com.

DATED this 22nd day of November, 2016.

	BY ORDER OF THE BOARD OF DIRECTORS

	(Signed) “Tel Matrundola”

	Tel Matrundola
	Chair of the Board of Directors

TABLE OF CONTENTS

GENERAL QUESTIONS AND ANSWERS	1
MANAGEMENT INFORMATION CIRCULAR	12
INFORMATION CONCERNING THE MEETINGS	18
PARTICULARS OF THE TRANSACTION	25
DISSENT RIGHTS OF SECURITYHOLDERS	57
RISK FACTORS	61
PROCEDURE FOR EXCHANGE OF PWC SECURITIES	64
CERTAIN CANADIAN FEDERAL INCOME TAX CONSIDERATIONS	65
INDEBTEDNESS OF DIRECTORS AND EXECUTIVE OFFICERS	73
STATUTORY RIGHTS	74
AUDITORS, TRANSFER AGENT AND TRUSTEE	75
OTHER INFORMATION AND MATTERS	75
LEGAL MATTERS	75
INTERESTS OF EXPERTS	75
ADDITIONAL INFORMATION	75
APPROVAL OF DIRECTORS	76
CONSENT OF CROSBIE & COMPANY INC.	77

ADDENDA

APPENDIX A	GLOSSARY OF TERMS
APPENDIX B	PWC COMMON SHAREHOLDERS RESOLUTION
APPENDIX C	PWC CLASS B PREFERRED SHAREHOLDERS RESOLUTION
APPENDIX D	PWC SERIES C NOTEHOLDERS RESOLUTION
APPENDIX E	CROSBIE FAIRNESS OPINIONS AND FORMAL VALUATIONS
APPENDIX F	PWC CLASS B ARTICLES OF AMENDMENT
APPENDIX G	PWC FORM OF SUPPLEMENTAL INDENTURE
APPENDIX H	SECTION 190 OF THE CBCA

GENERAL QUESTIONS AND ANSWERS

The following are some questions that you may have regarding the Transaction, and brief answers to those questions. You are urged to carefully read this PWC Circular, including its appendices, the Joint Disclosure Booklet and the other documents incorporated by reference and referred to in this PWC Circular and the Joint Disclosure Booklet in their entirety because this section may not provide all of the information that is important to you with respect to the Transaction. Additional important information is contained in the addenda to, and the documents incorporated by reference into, this PWC Circular and the Joint Disclosure Booklet. Certain capitalized terms used in this “General Questions and Answers” section are defined in the “Glossary of Terms” which is attached as Appendix A hereto.

Q. What is the proposed transaction?

A. PWC is proposing to complete certain transactions (collectively, the “Transaction”) which include (among others) the redemption of the issued and outstanding Class A Preferred Shares of PWC and the PWC 7.5% Notes maturing March 31, 2017 for a cash payment in accordance with their terms, the exchange of the outstanding PWC Class B Preferred Shares and PWC Series C Notes (after giving effect to the waiver of certain interest payments thereon) for PWC Common Shares, the conversion of certain indebtedness owed by PWC into PWC Common Shares, the exchange of the outstanding PWC DSUs for PWC Common Shares and the amalgamation of PWC and VersaBank (prior to the Amalgamation, “VersaBank”) following which the amalgamated entity will continue as “VersaBank” (following the Amalgamation, the “Bank”). After the Transaction is completed, holders of PWC Common Shares, PWC Class B Preferred Shares and PWC Series C Notes will become Bank common shareholders.

The Transaction is the result of a strategic review process conducted by PWC under the supervision of the PWC Independent Committee and PWC Board which received advice from experienced financial and legal advisors throughout the course of the process. After review of the other strategic opportunities reasonably available to PWC, including the results of VersaBank having sought expressions of interest for its sale to a third party, as described below under “Particulars of the Transaction — Background to the Transaction”, in each case taking into account the potential benefits, risks and uncertainties associated therewith, the PWC Independent Committee and the PWC Board believe that the Transaction represents the best available alternative for PWC.

Q. What am I being asked to approve?

A. At the PWC Common Shareholders Meeting, PWC Common Shareholders will be asked to approve: (i) the redemption of the issued and outstanding PWC Class A Preferred Shares for a cash payment in accordance with their terms, (ii) amendments to the articles of PWC to effect the change of the outstanding PWC Class B Preferred Shares into PWC Common Shares, (iii) amendments to the Series C Indenture to effect the exchange of the Series C Notes into PWC Common Shares, (iv) the conversion of all of the indebtedness owed by PWC to 340268 Ontario Limited into PWC Common Shares, (v) the exchange of the outstanding PWC DSUs for PWC Common Shares, (vi) the issuances of PWC Common Shares in connection with the foregoing, and (vii) the amalgamation of PWC with VersaBank pursuant to Section 228 of the Bank Act

If you have any questions or need assistance completing your form of proxy or voting instruction form, please call Kingsdale Shareholder Services at 1-877-659-1819, or 1-416-867-2272, or email at contactus@kingsdaleshareholder.com

(Canada) pursuant to which PWC Common Shares outstanding immediately prior to the Amalgamation will be converted into common shares of the Bank. The full text of the PWC Common Shareholders Resolution is set forth as Appendix B to this PWC Circular.

At the PWC Class B Preferred Shareholders Meeting, PWC Class B Preferred Shareholders will be asked to approve amendments to the articles of PWC to effect the change of the outstanding PWC Class B Preferred Shares into PWC Common Shares. The full text of the PWC Class B Preferred Shareholders Resolution is set forth as Appendix C to this PWC Circular.

At the PWC Series C Noteholders Meeting, PWC Series C Noteholders will be asked to approve the waiver by the holders of PWC Series C Notes of certain interest payments on such notes, and amendments to the Series C Indenture to effect the exchange of the outstanding PWC Series C Notes into PWC Common Shares. The full text of the PWC Series C Noteholders Resolution is set forth as Appendix D to this PWC Circular.

By voting FOR the separate resolutions referred to above, PWC Securityholders will, in effect, be voting to facilitate the Transaction as a whole, and the direct or indirect exchange of their PWC Securities into Bank Common Shares. In order for the Transaction to proceed, the applicable PWC Securityholders must approve each of the PWC Common Shareholders Resolution, the PWC Class B Preferred Shareholders Resolution and the PWC Series C Noteholders Resolution.

Q. How does the board of directors of PWC recommend that I vote?

A. The PWC Board unanimously recommends that PWC Securityholders vote FOR the PWC Common Shareholders Resolution, the PWC Class B Preferred Shareholders Resolution and the PWC Series C Noteholders Resolution. After careful consideration and taking into account, among other things, the Crosbie Fairness Opinions and Formal Valuations, and the recommendation of the PWC Independent Committee, the PWC Board, after receiving legal and financial advice, has unanimously determined that the Transaction is in the best interests of PWC and fair to PWC Securityholders.

Q. What are the benefits of the Transaction?

A. In the course of the evaluation of the Transaction by the PWC Independent Committee and the PWC Board, the PWC Independent Committee and the PWC Board consulted with its senior management, its financial advisor, Crosbie, and considered a number of factors, including, among others, the following:

(a) Strategic Review Process. The Transaction is the result of a strategic review process conducted under the supervision of the PWC Independent Committee and PWC Board which received advice from experienced financial and legal advisors throughout the course of the process. After review of the other strategic opportunities reasonably available to PWC, including the results arising from VersaBank having sought expressions of interest for its sale to a third party, as described above under “Particulars of the Transaction — Background to the Transaction”, in each case taking into account the potential benefits, risks and uncertainties associated therewith, the PWC Independent Committee and the PWC Board believe that the Transaction represents the best available alternative for PWC and is in the best interests of PWC, taking into consideration the interests of all of its stakeholders.

(b) Enhanced Value for PWC Securityholders Beyond PWC’s Holding of VersaBank Common Shares. Following the completion of the Transaction, including the Amalgamation, PWC Securityholders, as direct securityholders of the Bank, should be able to realize the benefit of (and value for) certain tax assets. PWC has tax loss carry-forwards that are currently of limited use to PWC, a holding company that does not have any taxable income, but should be available to the Bank following the Amalgamation. Subject to the assumptions, limitations and qualifications set forth in the Crosbie Fairness Opinions and Formal Valuations, Crosbie estimates the present value to the Bank of the benefit resulting from the tax loss carry-forwards to be between $11.4 million and $11.9 million based on the Bank’s projected utilization of such tax loss carry-forwards.

(c) Required Regulatory Approval. The Amalgamation Agreement has received the approval of the Superintendent under section 225 of the Bank Act (Canada) and the Amalgamation must be approved by the Minister under section 228 of the Bank Act (Canada). There is no assurance that the Superintendent would permit any other transaction, or other course of action, based on the implications for VersaBank of a transaction involving its significant shareholder.

(d) Improved Financial Position. The PWC Recapitalization, Redemptions and Debt Satisfaction will facilitate the Amalgamation and will result in a deleveraging of PWC, thereby resolving a challenging situation in which the payment of interest and dividends on PWC’s outstanding debt and preferred shares is being largely satisfied by the sale and/or transfer of VersaBank Common Shares which may be insufficient for these purposes in the mid to long-term and may lead to further deterioration in the value of the PWC Securities. These sales have the effect of reducing PWC’s interest in VersaBank and are unlikely to be sustainable over time. PWC does not have other assets capable of generating income sufficient to fund PWC’s ongoing interest and dividend obligations.

(e) Direct Participation by PWC Securityholders in Future Growth of the Bank. PWC Securityholders who receive Bank Common Shares pursuant to the Amalgamation will continue to have the opportunity to participate in any future increase in value of VersaBank, which should be enhanced by the value added by the PWC tax loss carry-forwards that should be available to the Bank following completion of the Transaction.

supervision of the PWC Independent Committee, prepared formal written valuations of the PWC Common Shares and of the Bank Common Shares to be received by holders of PWC Common Shares pursuant to the Amalgamation. Subject to the assumptions, limitations and qualifications set forth in the Crosbie Fairness Opinions and Formal Valuations, Crosbie is of the opinion that, as of November 15, 2016, the fair market value of the PWC Common Shares is in the range of $0.05 to $0.49 per PWC Common Share and the fair market value of the Bank Common Shares is in the range of $6.24 to $7.97 per Bank Common Share.

(g) Allocation of Bank Common Shares. The PWC Board considered and received advice from its financial advisors on the impact of the Transaction on the holders of PWC Securities as well as debtholders and other stakeholders of PWC and determined that the number of Bank Common Shares to be received by the holders of each class of PWC Securities under the Transaction was reasonable and fair to each class.

(h) Treatment of PWC Class A Preferred Shares and PWC 7.5% Notes. The PWC Board considered whether the PWC Recapitalization should include an exchange of the PWC Class A Preferred Shares and the PWC 7.5% Notes for PWC Common Shares. The PWC Board ultimately determined that it was inappropriate to give the holders of PWC Class A Preferred Shares and PWC 7.5% Notes material influence over the success of the Transaction given that the aggregate value of their securities is immaterial in the context of the Transaction.

(i) Value to be Received by the Holders of PWC Series C Notes. The PWC Board considered the advice they received to the effect that the value range for the Bank Common Shares to be indirectly issued to PWC Series C Noteholders pursuant to the Transaction, as outlined in the Crosbie Fairness Opinions and Formal Valuations, includes amounts equal to or greater than the amount required to satisfy repayment of the principal amount of the PWC Series C Notes at maturity. Further, the PWC Board considered that based on the pro forma book value of the Bank Common Shares, holders of PWC Series C Notes will receive value approximately equal to the principal amount and interest owing on the PWC Series C Notes through the closing of the Transaction, assuming that the Transaction is completed in the first quarter of calendar year 2017, as currently anticipated. The PWC Board also considered that the holders of PWC Series C Notes would be provided with PWC Series C Dissent Rights in the context of the Transaction, even though these PWC Series C Dissent Rights are not required under the terms of the Series C Indenture or applicable law.

(j) Value to be Received by the Holders of PWC Class B Preferred Shares. The PWC Board considered that the value range for the Bank Common Shares indirectly issued to PWC Class B Preferred Shareholders pursuant to the Transaction, as outlined in the Crosbie Fairness Opinions and Formal Valuations, includes amounts that are greater than the market price of the PWC Class B Preferred Shares as of the date of the announcement of the Initially Proposed Transaction on September 12, 2016 and the announcement of the amended terms of the Transaction on November 15, 2016.

Shares as of the date of the announcement of the amended terms of the Transaction on November 15, 2016. The PWC Board also considered that in the absence of the Amalgamation, which requires approval by the PWC Common Shareholders, the tax loss carry-forwards of PWC would not be available to the Bank and it is unlikely that material value would be realized for such tax loss carry-forwards. Alternatives to the Transaction, including a distribution or transfer of PWC’s assets to holders of PWC Securities, would result in the value of the tax loss carry-forwards being lost. Accordingly, the holders of PWC Common Shares should receive a portion of the value attributable to the tax loss carry-forwards of PWC given that other classes of PWC Securities are also expected to benefit from such value.

(l) Compliance with Terms of the Series C Indenture. The PWC Board considered the fact that the PWC Series C Amendments will be sought in accordance with the terms of the PWC Series C Indenture governing the rights of the holders of PWC Series C Notes. The Series C Indenture expressly contemplates that modifications of, or changes in, the provisions of the Series C Indenture require the approval of not less than 662/3% of the votes given on a poll at a meeting of all PWC Series C Noteholders. In the past, PWC has amended fundamental terms of the Series C Indenture by way of an amendment to the Series C Indenture in the same manner as is contemplated in the present circumstances.

(m) Previous Amendments to the PWC Class B Preferred Shares. The PWC Board considered the fact that, in the past, PWC has amended the terms of the PWC Class B Preferred Shares by way of articles of amendment, including to amend the amount of the dividend and offer limited redemption rights, in the same manner as is contemplated in the present circumstances.

(n) Simplified Corporate and Capital Structure. PWC is a holding company that currently owns approximately 62.8% of the outstanding VersaBank Common Shares. The proposed Transaction will result in a simplified corporate and capital structure for the combined enterprise which is expected to enable the Bank to further unlock value for its shareholders (including, as a result of the Amalgamation, the former PWC Securityholders).

(o) Improved Liquidity. The Bank Common Shares to be received by PWC Securityholders will have greater liquidity than the limited liquidity of the PWC Securities. In addition, present holders of PWC Securities will benefit from having a direct investment in the Bank, as opposed to their current indirect investment through the PWC holding company structure.

(p) Improved Access to Capital Markets. The Bank is expected to have better access to third-party investors who will be more attracted to the Bank’s simplified corporate and capital structure and improved liquidity as compared to the two-tier structure prior to the Transaction.

(q) Avoidance of Duplicative Costs. The Transaction will result in the avoidance of duplicative costs and resources associated with the current structure, including (among others) those arising as a result of the duplication of management efforts, and board and public company activities and expenses.

(r) Required Securityholder Approval. The PWC Board considered that 662/3% of the votes cast by the holders of each of the PWC Common Shares, PWC Class B Preferred Shares and PWC Series C Notes must approve their respective resolution, as well as “minority approval” by the holders of PWC Common Shares pursuant to MI 61-101.

(s) Dissent Rights. PWC Common Shareholders, PWC Class B Preferred Shareholders and PWC Series C Noteholders have been provided with the right to exercise Dissent Rights.

(t) The Terms of the Pre-Amalgamation Agreement. Under the Pre-Amalgamation Agreement, the PWC Board remains able to respond, in accordance with its fiduciary duties, to unsolicited Acquisition Proposals that constitute or could reasonably be expected to constitute or lead to a Superior Proposal. In addition, no termination fee is payable by PWC in connection with the termination of the Pre-Amalgamation Agreement or the Amalgamation Agreement.

The foregoing is intended to be a summary of certain of the reasons the PWC Board, after consultation with its financial and legal advisors, and on the unanimous recommendation of the PWC Independent Committee, has determined that the Transaction is in the best interests of PWC and fair to PWC Securityholders, and unanimously recommends that holders of PWC Securities vote FOR their respective resolutions in connection with the Transaction. See also “Particulars of the Transaction — Recommendation of the PWC Independent Committee”, “— Recommendation of the PWC Board”, “— Reasons for and other Consideration in Relation to the Transaction”, “— Crosbie Fairness Opinions and Formal Valuations” and the full text of the Crosbie Fairness Opinions and Valuations attached as Appendix E to this PWC Circular, “Forward-Looking Information” and “Risk Factors” among the other provisions of this PWC Circular.

Q. What will PWC Common Shareholders receive in the Transaction?

A. Every 54.508758 PWC Common Shares will be exchanged for one (1) Bank Common Share.

Q. What will PWC Class B Preferred Shareholders receive in the Transaction?

A. Effectively, each PWC Class B Preferred Share will be exchanged for approximately 2.793 Bank Common Shares.

Q. What will PWC Series C Noteholders receive in the Transaction?

A. Effectively, each $1,000 in principal amount of PWC Series C Notes will be exchanged for approximately 137.009 Bank Common Shares.

Q. What will PWC Class A Preferred Shareholders and holders of PWC 7.5% Notes receive in the Transaction?

A. PWC will redeem all PWC Class A Preferred Shares and PWC 7.5% Notes for a cash payment in accordance with their terms.

Q. What is required for the Transaction to become effective?

A. The Transaction is subject to a number of conditions, including the following (among others):

(a) the PWC Common Shareholders Resolution must be approved by:

(i) not less than 662/3% of the votes cast at the PWC Common Shareholders Meeting; and

(ii) a majority of the votes cast by PWC Common Shareholders, other than those required to be excluded in determining such approval pursuant to MI 61-101 and the rules and policies of the TSX;

(b) the PWC Class B Preferred Shareholders Resolution must be approved by not less than 662/3% of the votes cast at the PWC Class B Preferred Shareholders Meeting;

(c) the PWC Series C Noteholders Resolution must be approved by not less than 662/3% of the votes cast at the PWC Series C Noteholders Meeting;

(d) the Amalgamation Resolution must be approved by not less than 662/3% of the votes cast at the VersaBank Meeting; and

(e) the Amalgamation must be approved by the Minister under section 228 of the Bank Act (Canada).

Q. When do you expect the Transaction to be completed?

A. If the necessary approvals, including the PWC Securityholder Approvals, the VersaBank Shareholder Approval and the Required Regulatory Approvals are obtained, it is currently anticipated that the Transaction will be completed in the first quarter of calendar 2017.

Q. Am I entitled to vote?

A. Only PWC Common Shareholders, PWC Class B Preferred Shareholders and PWC Series C Noteholders who are holders of record as at November 23, 2016 (the “Record Date”) are entitled to receive notice of and vote at the PWC Common Shareholders Meeting, the PWC Class B Preferred Shareholders Meeting and the PWC Series C Noteholders Meeting, respectively, either in person or by proxy.

Q. How can I vote?

A. Registered PWC Securityholders as at the Record Date may attend the applicable PWC Meeting to vote in person. If you are a Registered PWC Securityholder and do not plan to attend the

applicable PWC Meeting, you may vote by submitting a proxy form. You may receive more than one set of voting materials and multiple proxy forms if you hold multiple types of PWC Securities. If you receive multiple proxy forms, please complete, sign, date and return each proxy form that you receive or otherwise follow the voting instructions set forth in this PWC Circular to ensure that you vote every PWC Security that you hold.

PWC Common Shareholders should complete and return each proxy form accompanying this PWC Circular and the Joint Disclosure Booklet as instructed and by no later than 10:30 a.m. (Toronto time) on December 28, 2016 (or no later than 48 hours, excluding Saturday, Sundays and holidays, before any reconvened meeting if the PWC Common Shareholders Meeting is adjourned or postponed).

PWC Class B Preferred Shares should complete and return each proxy form accompanying this PWC Circular and the Joint Disclosure Booklet as instructed and by no later than 10:30 a.m. (Toronto time) on December 28, 2016 (or no later than 48 hours, excluding Saturday, Sundays and holidays, before any reconvened meeting if the PWC Class B Preferred Shareholders Meeting is adjourned or postponed).

PWC Series C Noteholders should complete and return each proxy form accompanying this PWC Circular and the Joint Disclosure Booklet as instructed and by no later than 10:30 a.m. (Toronto time) on December 28, 2016 (or no later than 48 hours, excluding Saturday, Sundays and holidays, before any reconvened meeting if the PWC Series C Noteholders Meeting is adjourned or postponed).

Registered PWC Securityholders may vote via any of the following ways:

· in person at the applicable PWC Meeting(s);

· online at www.investorvote.com and entering the 15-digit control number found on the form of proxy you received;

· telephone by calling Computershare Investor Services Inc. at 1-866-732-8683; or

· mail your completed, signed form of proxy to:

Computershare Investor Services Inc.
Attention: Proxy Department
8th Floor, 100 University Avenue,
Toronto, ON M5J 2Y1

If you are a Beneficial PWC Securityholder, you will have received this PWC Circular and the Joint Disclosure Booklet from your Intermediary along with a voting instruction form. You may receive more than one set of voting materials and multiple proxy forms or voting instruction forms if you hold multiple types of PWC Securities or multiple accounts. You are required to reach out to your intermediary to provide instructions as to how to vote your PWC Securities. If you receive multiple proxy forms or voting instruction forms, please complete, sign, date and return each proxy form or voting instruction form that you receive to ensure that you vote every PWC Security that you hold.

Beneficial PWC Securityholders may vote via any of the following ways:

· online at www.proxyvote.com and entering the 16-digit control number found on the voting instruction form you received;

· mail in your completed, signed voting instruction form, using the postage paid envelope included in your package; or

· telephone by calling your intermediary and providing your voting instructions.

Q. Who votes my securities and how will they be voted if I return a form of proxy?

A. The PWC Securities represented by proxies will be voted in favour or voted against the PWC Common Shareholders Resolution, the PWC Class B Preferred Shareholders Resolution or the PWC Series C Noteholders Resolution, as applicable, by the persons designated in the proxies in accordance with the direction of the PWC Securityholders appointing them. In the event that no specification is made in the proxies given in favour of management nominees, the PWC Securities represented by such proxies will be voted by the proxy nominees FOR the PWC Common Shareholders Resolution, the PWC Class B Preferred Shareholders Resolution or the PWC Series C Noteholders Resolution, as applicable.

Q. Can I appoint someone other than the individuals named in the enclosed form of proxy to vote my securities?

A. Yes, you have the right to appoint the person of your choice, who does not need to be a PWC Securityholder, to attend and act on your behalf at the applicable PWC Meeting. If you wish to appoint a person other than the names that appear, then strike out those printed names appearing on the form of proxy and insert the name of your chosen proxyholder in the space provided or submit another appropriate form of proxy permitted by law, and in either case, send or deliver the completed proxy to the offices of Computershare Investor Services Inc. before the above-mentioned deadline. IF YOU APPOINT A NON-MANAGEMENT PROXYHOLDER PLEASE MAKE THEM AWARE AND ENSURE THEY WILL ATTEND THE APPLICABLE MEETING(S) FOR THE VOTE TO COUNT.

Q. Can I revoke a proxy or voting instruction?

A. A PWC Common Shareholder or a PWC Class B Preferred Shareholder may revoke a proxy:

(a) by an instrument in writing executed by the PWC Common Shareholders or PWC Class B Preferred Shareholder, as applicable, or by an attorney in writing or, if the PWC Common Shareholder or PWC Class B Preferred Shareholder is a corporation, under its corporate seal or by an officer or attorney thereof duly authorized, and deposited:

(i) at the registered office of PWC at any time up to and including the last business day preceding the date of the PWC Common Shareholders Meeting or the PWC Class B Preferred Shareholders Meeting, as applicable, or any postponements or adjournments thereof; or

(ii) with the chair of the PWC Common Shareholders Meeting or the chair of the PWC Class B Preferred Shareholders Meeting on December 30, 2016 or any postponements or adjournments of the PWC Common Shareholders Meeting or PWC Class B Preferred Shareholders Meeting, as applicable; or

(b) in any other manner permitted by law.

A PWC Series C Noteholder may revoke a proxy:

(c) by an instrument in writing executed by the PWC Series C Noteholder or by an attorney in writing or, if the PWC Series C Noteholder is a corporation, under its corporate seal or by an officer or attorney thereof duly authorized, and deposited:

(ii) with the chair of the PWC Series C Noteholders Meeting on December 30, 2016 or any postponement or adjournment of the PWC Series C Noteholders Meeting; or

(d) in any other manner permitted by law.

Q. How will I receive my new Bank Common shares upon completion of the Transaction?

A. In order for a Registered PWC Securityholder to receive Bank Common Shares on completion of the Transaction, such Registered PWC Securityholder must deposit with Computershare Investors Services Inc. (the “Depositary”) duly completed Letter(s) of Transmittal together with the holder’s certificates representing PWC Securities and such other documents as may be required by the Depositary.

PWC Securityholders whose PWC Securities are registered in the name of a broker, dealer, bank, trust company, or another Intermediary must contact their Intermediary to exchange their PWC Securities.

As soon as practicable following the Effective Time, the Bank shall deliver or arrange to be delivered to the Depositary the aggregate number of Bank Common Shares issuable pursuant to the Amalgamation Agreement, which Bank Common Shares shall be held by the Depositary as agent and nominee for former PWC Securityholders for distribution to such former holders.

Q. What do I need to do now?

A. Carefully read and consider the information contained, and incorporated by reference into, this PWC Circular and the Joint Disclosure Booklet. You are required to make an important decision. If you have any questions about deciding how to vote, you should contact your own legal, tax, financial or other professional advisor. Your vote is important and you are encouraged to vote promptly.

Q. What if I have other questions?

A. Securityholders that have questions regarding the Transaction or require further assistance are encouraged to contact the proxy solicitation and information agent, Kingsdale Shareholder Services, by: (i) telephone, toll-free in North America at 1-877-659-1819 or at 1-416-867-2272 outside of North America; or (ii) e-mail to contactus@kingsdaleshareholder.com.

MANAGEMENT INFORMATION CIRCULAR

This PWC Circular is furnished in connection with the solicitation of proxies by the management of PWC for use at the PWC Meetings to be held on December 30, 2016, at the place and time and for the purposes set forth in the accompanying notices of meetings.

Information in this PWC Circular and the Joint Disclosure Booklet

The information contained in this PWC Circular and the Joint Disclosure Booklet is given as at November 18, 2016, except where otherwise noted and except that information in documents incorporated by reference is given as of the dates noted therein. No person has been authorized to give any information or to make any representation in connection with the Transaction and other matters described herein other than those contained in this PWC Circular and the Joint Disclosure Booklet and, if given or made, any such information or representation should be considered not to have been authorized by PWC or VersaBank.

This PWC Circular and the Joint Disclosure Booklet does not constitute the solicitation of an offer to purchase, or the making of an offer to sell, any securities or the solicitation of a proxy by any person in any jurisdiction in which such solicitation or offer is not authorized or in which the person making such solicitation or offer is not qualified to do so or to any person to whom it is unlawful to make such solicitation or offer.

Information contained in this PWC Circular and the Joint Disclosure Booklet should not be construed as legal, tax or financial advice and PWC Securityholders are urged to consult their own professional advisors in connection therewith.

Descriptions in this PWC Circular and the Joint Disclosure Booklet of the terms of the Pre-Amalgamation Agreement, the Amalgamation Agreement, the Debt Satisfaction Agreement, the Loan Facility or the Crosbie Fairness Opinions and Formal Valuations are summaries of the terms of those documents. PWC Securityholders should refer to the full text of each of these documents. The Amalgamation Agreement, the Pre-Amalgamation Agreement, the Debt Satisfaction Agreement, and the Loan Facility, and amendments thereto, can be found under PWC’s profile on SEDAR. The Crosbie Fairness Opinions and Formal Valuations, the PWC Class B Articles of Amendment and the PWC Supplemental Indenture are appended to this PWC Circular as Appendix E, F and G. You are urged to carefully read the full text of these documents.

Information Pertaining to VersaBank

Certain information in this PWC Circular and the Joint Disclosure Booklet pertaining to VersaBank, including, but not limited to, information pertaining to VersaBank under “Information Concerning VersaBank”, which is attached as Schedule B in the Joint Disclosure Booklet has been furnished by VersaBank, or is derived from VersaBank’s publicly available documents or records on file with securities regulatory authorities and other public sources at the time of this PWC Circular. Although PWC does not have any knowledge that would indicate that such information is untrue or incomplete, neither PWC nor any of its directors or officers assume any responsibility for the accuracy or completeness of such information, or for the failure by VersaBank to disclose events or information that may affect the completeness or accuracy of such information.

For further information regarding VersaBank, please refer to its filings with securities authorities which may be obtained through the SEDAR website at www.sedar.com.

Forward-Looking Information

This PWC Circular, the Joint Disclosure Booklet, and the documents incorporated by reference in this PWC Circular or the Joint Disclosure Booklet, contain forward-looking information within the meaning of the applicable securities legislation that are based on expectations, estimates and projections as at the date of this PWC Circular and the Joint Disclosure Booklet or the dates of the documents incorporated by reference in this PWC Circular and the Joint Disclosure Booklet, as applicable. This forward-looking information includes but is not limited to statements and information concerning: the Transaction and related transactions, including the Redemptions; covenants of PWC and VersaBank; the timing for the implementation of the Transaction and the potential risks and benefits of the Transaction; the likelihood of the Transaction being completed; the principal steps of the PWC Recapitalization and the Amalgamation; receipt of the PWC Securityholder Approvals, the VersaBank Shareholder Approval and the Required Regulatory Approvals; future growth and potential achievement of the Bank; trading price of securities of the Bank; board and management team of the Bank following the completion of the Transaction; statements made in, and based upon, the Crosbie Fairness Opinions and Formal Valuations; statements relating to the business, future activities of, and developments related to PWC and VersaBank after the date of this PWC Circular and the Joint Disclosure Booklet and prior to the Effective Time; statements relating to the business, future activities of, and developments related to the Bank after the Effective Date; market position, and future financial or operating performance of the Bank; liquidity of the Bank’s securities; access to capital markets by the Bank; pro forma consolidated financial statements of the Bank and statements based on such financial statements; and other events or conditions that may occur in the future.

Any statements that involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or performance (often but not always are accompanied by phrases such as ‘‘expects’’, ‘‘is expected’’, ‘‘anticipates’’, ‘‘plans’’, ‘‘budget’’, ‘‘scheduled’’, ‘‘forecasts’’, ‘‘estimates’’, ‘‘believes’’, “aims”, “endeavours”, “projects”, “continue”, “predicts”, “potential”, ‘‘intends’’, or the negative of these terms or variations of such words and phrases or stating that certain actions, events or results ‘‘may’’, ‘‘could’’, ‘‘would’’, ‘‘might’’, ‘‘will’’, “should”, be taken to occur or be achieved) are not statements of historical fact and may be forward-looking information and are intended to identify forward-looking information.

This forward-looking information is based on the beliefs of PWC and VersaBank’s management, as the case may be, as well as on assumptions, which such management believes to be reasonable based on information currently available at the time such statements were made. However, there can be no assurance that the forward-looking information will prove to be accurate. Such assumptions and factors include, among other things, the satisfaction of the terms, covenants and conditions of the Pre-Amalgamation Agreement and the Amalgamation Agreement, including the receipt of the PWC Securityholder Approvals, the VersaBank Shareholder Approval and the Required Regulatory Approvals.

By its nature, forward-looking information is based on assumptions and involves known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of PWC, VersaBank, or the Bank to be materially different from any future results, performance or achievements expressed or implied by the forward-looking information. Forward-looking information is subject to a variety of risks, uncertainties and other factors which could cause actual events or results to differ from those expressed or implied by forward-looking information, including, without limitation: the Pre-Amalgamation Agreement and the Amalgamation Agreement may be terminated in certain circumstances; the terms of the Pre-Amalgamation Agreement and the Amalgamation Agreement

in respect of restricting third parties from making an Acquisition Proposal; the certainty that all conditions precedent to the Pre-Amalgamation Agreement and the Amalgamation Agreement will be satisfied or, if not satisfied, waived (or not waived) by either PWC or VersaBank, notably in respect of any conditions relating to the valid exercise of the applicable Dissent Rights; the failure to obtain the financing necessary to complete the Redemptions; general business, economic, competitive, political, regulatory and social uncertainties; risks related to factors beyond the control of PWC or VersaBank; risks that PWC and VersaBank may not realize the benefits currently anticipated by the Transaction and other related transactions; the fact that PWC and VersaBank will incur costs even if the Transaction is not completed; risks related to the business of PWC and VersaBank before the Amalgamation; risks related to political developments and policy shifts; risks related to amendments to laws; risks related to the market value of PWC Securities and Bank Shares; and delays in obtaining the Required Regulatory Approvals. Additional risks and uncertainties regarding PWC are described in its management’s discussion and analysis of operations and financial condition for the year ended October 31, 2015 which is available on SEDAR at www.sedar.com.

Some of the important risks and uncertainties that could affect forward-looking information are described further in this PWC Circular, Joint Disclosure Booklet, and in other documents incorporated by reference in this PWC Circular or the Joint Disclosure Booklet. Although PWC has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking information, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that forward-looking information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information. Accordingly, readers should not place undue reliance on forward-looking information. This forward-looking information is made as of the date of this PWC Circular and the Joint Disclosure Booklet, and other than as required by applicable Securities Laws, PWC assumes no obligation to update or revise them to reflect new events or circumstances.

Notice to PWC Securityholders in the United States

PWC is a corporation organized under the laws of Canada. The solicitation of proxies involves securities of a Canadian issuer and is being effected in accordance with applicable corporate and securities laws in Canada and is not subject to the requirements of Section 14(a) of the Exchange Act, based on exemptions from the proxy solicitation rules for “foreign private issuers” (as such term is defined in Rule 3b-4 under the Exchange Act). PWC Securityholders should be aware that the requirements applicable to PWC under Canadian laws may differ from requirements under corporate and securities laws relating to corporations in other jurisdictions.

The Amalgamation involves the distribution of Bank Common Shares to PWC Securityholders in the United States in exchange for their PWC Common Shares. Each of PWC and VersaBank are entities incorporated and existing outside of the United States. The Amalgamation is subject to the disclosure requirements of a foreign jurisdiction, which are different from those of the United States. The Bank Common Shares to be issued to PWC Securityholders in the United States pursuant to the Amalgamation have not been registered under the U.S. Securities Act or the securities laws of any state of the United States and are being issued to PWC Securityholders in the United States in reliance on the exemption from registration set forth in Rule 802 under the U.S. Securities Act and exemptions provided under the securities laws of each applicable state of the United States. Rule 802 under the U.S. Securities Act provides an exemption from registration under the U.S. Securities Act for offers and sales of securities issued in exchange for securities of a foreign subject company where:

· the subject company (the Bank) is a “foreign private issuer”, as defined in Rule 405 under the U.S. Securities Act;

· PWC Securityholders and VersaBank Shareholders in the United States hold no more than 10 percent (10%) of the securities that are the subject of the Amalgamation;

· PWC Securityholders and VersaBank Shareholders in the United States participate in the Amalgamation on terms at least as favourable as those offered to any other holder of the subject securities;

· an informational document in connection with the Amalgamation is published or disseminated to PWC Securityholders in the United States, complying with the disclosure requirements set forth in Rule 802 under the U.S. Securities Act, on a comparable basis to that provided to holders of the subject securities in the foreign subject company’s home jurisdiction; and

· the informational document, including any amendments thereto, is furnished to the United States Securities and Exchange Commission on Form CB together with a Form F-X to appoint an agent for service of process in the United States.

This PWC Circular will be filed with the United States Securities and Exchange Commission on Form CB.

The Bank Common Shares to be issued pursuant to the Amalgamation will be unregistered “restricted securities” within the meaning of Rule 144 under the U.S. Securities Act to the same extent and proportion that the securities exchanged by PWC Securitholders in the United States pursuant to the Amalgamation were restricted securities.

PWC Securityholders in the United States that hold PWC Common Shares that are not restricted securities under Rule 144 will receive Bank Common Shares that are unrestricted securities and such PWC Securityholders in the United States that are not deemed to be affiliates of the Bank after completion of the Amalgamation may freely re-sell their securities under U.S. securities laws. As defined in Rule 144, an “affiliate” of an issuer is a person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with the issuer. PWC Securityholders that hold PWC Common Shares that are restricted securities under Rule 144 will receive Bank Common Shares that are restricted securities under Rule 144. Restricted securities may not be sold or transferred unless registered under the U.S. Securities Act or an exemption from registration is available.

PWC Securityholders in the United States that receive Bank Common Shares as part of the Amalgamation and that are affiliates of the Bank within 90 days before the Amalgamation or who will be affiliates of the Bank after the Amalgamation will be subject to restrictions on resale imposed by the U.S. Securities Act with respect to the Bank Common Shares issued pursuant to the Amalgamation. These affiliates may not resell their Bank Common Shares unless such shares are registered under the U.S. Securities Act or an exemption from registration is available. In general, under Rule 144 of the U.S. Securities Act, persons who are affiliates of the Bank after the Amalgamation will be entitled to sell in the United States, during any three month period, a portion of the Bank Common Shares that they receive in connection with the Amalgamation, provided that the number of such Bank Common Shares sold does not exceed one percent of the then outstanding class of Bank Common Shares subject to specific

restrictions on manner of sale, notice requirements, aggregation rules and the availability of current public information about the Bank.

Subject to certain limitations, at any time that the Bank is a “foreign private issuer” (as defined in Rule 405 under the U.S. Securities Act), PWC Securityholders in the United States that receive Bank Common Shares as part of the Amalgamation and that are affiliates (solely by virtue of such holders status as an officer or director) of the Bank after the Amalgamation or of the Bank within 90 days before the Amalgamation may immediately resell the Bank Common Shares outside the United States without registration under the U.S. Securities Act pursuant to Regulation S. Generally, such persons may resell such securities in an “offshore transaction” if (i) no offer is made to a person in the United States; (ii) either (A) at the time the buyer’s buy order is originated, the buyer is outside the United States, or the seller and any person acting on its behalf reasonably believes that the buyer is outside the United States, or (B) the transaction is executed in, on or through a “designated offshore securities market” (which would include a sale through the TSX) if neither the seller nor any person acting on its behalf knows that the transaction has been pre-arranged with a buyer in the United States; and (iii) neither the seller, any affiliate of the seller or any person acting on any of their behalf engages in any “directed selling efforts” in the United States. For the purposes of Regulation S, “directed selling efforts” means “any activity undertaken for the purpose of, or that could reasonably be expected to have the effect of, conditioning the market in the United States for any of the securities being offered” in the resale transaction. Certain additional restrictions will apply to a person who is an affiliate of the Bank after the Amalgamation or of the Bank within 90 days before the Amalgamation other than solely by virtue of such holders status as an officer or director. The Bank is under no obligation to remain a foreign private issuer.

The Bank Common Shares issuable upon exercise of the PWC Replacement Options may not be issued in reliance upon the exemption from the registration requirements of the U.S. Securities Act provided by Rule 802 thereof and the PWC Replacement Options may be exercised in the United States or for the account or benefit of a U.S. Person only pursuant to an available exemption from the registration requirements of the U.S. Securities Act and applicable state securities laws. Prior to the issuance of Bank Common Shares upon exercise of the PWC Replacement Options, the Bank may require evidence (which may include in an opinion of counsel) reasonably satisfactory to the Bank to the effect that the issuance of such Bank Common Shares in the capital of the Bank do not require registration under the U.S. Securities Act or applicable state securities laws.

Bank Common Shares in the capital of the Bank received upon exercise of the PWC Replacement Options by PWC Option holders in the United States or who are U.S. Persons will be “restricted securities”, as such term is defined in Rule 144 under the U.S. Securities Act, and may not be resold unless such securities are registered under the U.S. Securities Act and all applicable state securities laws or unless an exemption from such registration requirements is available.

PWC Securityholders in the United States that receive Bank Common Shares as part of the Amalgamation are urged to consult with their own legal counsel to ensure that the resale of the Bank Common Shares complies with applicable securities legislation.

The enforcement of civil liabilities under the securities laws of other jurisdictions outside Canada may be affected adversely by the fact that PWC is organized under the laws of Canada, that all or substantially all of its assets are located in Canada and that all or substantially all of its directors and executive officers are residents of Canada. You may not be able to sue PWC or its directors or officers in a Canadian court for violations of foreign securities laws. It may be difficult to compel PWC to subject itself

to a judgment of a court outside Canada. Accordingly, PWC Securityholders resident in the United States should not assume that Canadian courts: (a) would enforce judgments of United States courts obtained in actions against such persons predicated upon civil liabilities under the securities laws of the United States or “blue sky” laws of any state within the United States or (b) would enforce, in original actions, liabilities against such persons predicated upon civil liabilities under the securities laws of the United States or “blue sky” laws of any state within the United States.

All financial statements incorporated by reference herein and in the Joint Disclosure Booklet have been prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board. Such financial statements may not be comparable to financial statements of United States companies.

THIS TRANSACTION AND THE SECURITIES ISSUABLE IN CONNECTION WITH THE TRANSACTION HAVE NOT BEEN APPROVED OR DISAPPROVED BY ANY SECURITIES REGULATORY AUTHORITY, INCLUDING THE UNITED STATES SECURITIES AND EXCHANGE COMISSION OR SECURITIES REGULATORY AUTHORITIES OF ANY STATE OF THE UNITED STATES, NOR HAS ANY SECURITIES REGULATORY AUTHORITY, INCLUDING THE UNITED STATES SECURITIES AND EXCHANGE COMISSION OR SECURITIES REGULATORY AUTHORITIES OF ANY STATE OF THE UNITED STATES, PASSED UPON THE FAIRNESS OR MERITS OF THIS TRANSACTION OR UPON THE ACCURACY OR ADEQUACY OF THE INFORMATION CONTAINED IN THIS PWC CIRCULAR. ANY REPRESENTATION TO THE CONTRARY IS AN OFFENCE.

PWC Securityholders who are foreign taxpayers should be aware that the Transaction described in this PWC Circular may have tax consequences both in Canada and such foreign jurisdiction. Such consequences for PWC Securityholders are not described in this PWC Circular. PWC Securityholders who are foreign taxpayers are advised to consult their tax advisors to determine the particular tax consequences to them of the Transaction contemplated in this PWC Circular.

Currency

All currency amounts referred to in this PWC Circular and the Joint Disclosure Booklet are in Canadian dollars, unless otherwise indicated.

Glossary of Terms

Certain terms used in this PWC Circular and the Joint Disclosure Booklet have the meanings set forth in Appendix A to this PWC Circular, unless such terms are defined elsewhere in this PWC Circular or the Joint Disclosure Booklet.

INFORMATION CONCERNING THE MEETINGS

Date, Time and Place of the PWC Meetings

The PWC Common Shareholders Meeting will be held at 9:00 a.m. (Toronto time) on December 30, 2016, at the offices of Stikeman Elliott LLP, 199 Bay Street, Commerce Court West, Suite 5300, Toronto, Ontario, Canada, unless adjourned or postponed.

The PWC Class B Preferred Shareholders Meeting will be held at 9:45 a.m. (Toronto time) on December 30, 2016, at the offices of Stikeman Elliott LLP, 199 Bay Street, Commerce Court West, Suite 5300, Toronto, Ontario, Canada, unless adjourned or postponed.

The PWC Series C Noteholders Meeting will be held at 10:30 a.m. (Toronto time) on December 30, 2016, at the offices of Stikeman Elliott LLP, 199 Bay Street, Commerce Court West, Suite 5300, Toronto, Ontario, Canada, unless adjourned or postponed.

Purpose of the PWC Meetings

At the PWC Common Shareholders Meeting, PWC Common Shareholders will be asked to consider and, if deemed advisable, to pass the PWC Common Shareholders Resolution (a copy of which is attached as Appendix B to this PWC Circular) and such other business as may properly come before the PWC Common Shareholders Meeting. As of the date of this PWC Circular and the Joint Disclosure Booklet, management of PWC knows of no other matter expected to come before the PWC Common Shareholders Meeting, other than the vote on the PWC Common Shareholders Resolution.

At the PWC Class B Preferred Shareholders Meeting, PWC Class B Preferred Shareholders will be asked to consider and, if deemed advisable, to pass the PWC Class B Preferred Shareholders Resolution (a copy of which is attached as Appendix C to this PWC Circular) and such other business as may properly come before the PWC Class B Preferred Shareholders Meeting. As of the date of this PWC Circular and the Joint Disclosure Booklet, management of PWC knows of no other matter expected to come before the Class B Preferred Shareholders Meeting, other than the vote on the PWC Class B Preferred Shareholders Resolution.

At the PWC Series C Noteholders Meeting, PWC Series C Noteholders will be asked to consider and, if deemed advisable, to pass the PWC Series C Noteholders Resolution (a copy of which is attached as Appendix D to this PWC Circular) and such other business as may properly come before the PWC Series C Noteholders Meeting. As of the date of this PWC Circular and the Joint Disclosure Booklet, management of PWC knows of no other matter expected to come before the PWC Meeting, other than the vote on the PWC Series C Noteholders Resolution.

PWC Securityholders Entitled to Vote

PWC Common Shareholders, PWC Class B Preferred Shareholders and PWC Series C Noteholders as at November 23, 2016 (the “Record Date”) are entitled to receive notice of and vote at the PWC Common Shareholders Meeting, the PWC Class B Preferred Shareholders Meeting and the PWC Series C Noteholders Meeting, respectively, either in person or by proxy.

Quorum for the PWC Common Shareholders Meeting shall be two or more persons who are present in person and either hold personally, or represent by proxy, not less than 5% of the aggregate number of PWC Common Shares.

Quorum for the PWC Class B Preferred Shareholders Meeting shall be holders who are present in person and either hold personally, or represent by proxy, at least 1% of the aggregate number of PWC Class B Preferred Shares.

Quorum for the PWC Series C Noteholders Meeting shall be PWC Series C Noteholders who are present in person or represented by proxy holding not less than 25% in aggregate principal amount of the PWC Series C Notes for the time being outstanding.

Only PWC Common Shareholders, PWC Class B Preferred Shareholders and PWC Series C Noteholders whose names have been entered in the registers of PWC as at the close of business on the Record Date will be entitled to receive notice of and vote at the PWC Common Shareholders Meeting, the PWC Class B Preferred Shareholders Meeting and the PWC Series C Noteholders Meeting, respectively. PWC Securities held through a broker, investment dealer, bank, trust company or other Intermediary, will be voted by the registered holder thereof, in accordance with the instructions given by the beneficial holder of such PWC Security to such Intermediary. No other securityholders are entitled to vote at the PWC Meetings other than PWC Common Shareholders, the PWC Class B Preferred Shareholders and the PWC Series C Noteholders.

As of the Record Date, there were: (i) 44,592,260 PWC Common Shares outstanding; (ii) 1,094,058 Class B Preferred Shares outstanding; and (iii) $61,686,000 aggregate principal amount of PWC Series C Notes outstanding. Each PWC Common Share and PWC Class B Preferred Share entitles the holder thereof to one vote at the PWC Common Shareholders Meeting and the PWC Class B Preferred Shareholders Meeting, respectively. Each PWC Series C Noteholder is entitled to one vote at the PWC Series C Noteholders Meeting in respect of each $1,000 principal amount of PWC Series C Notes held by such PWC Series C Noteholder.

To the best knowledge of PWC, as at the Record Date, no person or company beneficially owned, or exercised control or direction, directly or indirectly, over more than 10% of the PWC Common Shares, PWC Class B Preferred Shares, or PWC Series C notes other than:

Name	Type of PWC Security	Number of Securities		Percentage of outstanding
340268 Ontario Limited(1)(2)	PWC Common Shares	7,055,624		15.82	%
340268 Ontario Limited(1)(2)	PWC Series C Notes	$	22,499,000	36.47	%
Estate of Eugene George	PWC Common Shares	6,900,000		15.47	%

Notes:

(1) Patrick George, a director of PWC, is president of 340268. 340268 also beneficially owns or exercises control or direction over 217 PWC Class B Preferred Shares (representing approximately 0.02% of the outstanding PWC Class B Preferred Shares as of the Record Date).

(2) Patrick George, a director of PWC and president of 340268, beneficially owns or exercises control or direction over: (i) 835,082 PWC Common Shares (representing approximately 1.87% of the outstanding PWC Common Shares as of the Record Date); (ii) 5,000 PWC Class A Preferred Shares (representing approximately 1.59% of the outstanding PWC Class A Preferred Shares as of the Record Date); (iii) 682 PWC Class B Preferred Shares (representing approximately 0.06% of the outstanding PWC Class B Preferred Shares as of the Record Date); and (iv) $5,368,000 in principal amount of PWC Series C Notes (representing approximately 8.70% of the outstanding PWC Series C Notes as of the Record Date).

Solicitation of Proxies

This PWC Circular and Joint Disclosure Booklet is furnished to holders of PWC Common Shares, PWC Class B Preferred Shares and PWC Series C Notes in connection with the solicitation of proxies by or on behalf of management of PWC for use at the PWC Meetings. It is expected that the solicitation of proxies will be made primarily by mail. Proxies may also be solicited personally or by telephone by officers and directors and other representatives of PWC, as the case may be.

PWC has retained Kingsdale Shareholder Services (the “Proxy Solicitation and Information Agent”) to assist in the solicitation of proxies and may also retain other persons as it deems necessary to aid in the solicitation of proxies with respect to the PWC Meetings. PWC, VersaBank, and the Proxy Solicitation and Information Agent entered into an engagement agreement with customary terms and conditions, which provides that the Proxy Solicitation and Information Agent will be paid a strategic advisory and proxy solicitation management fee of $150,000, plus out-of-pocket expenses, and a fee of $50,000 if the PWC Securityholder Approvals and the VersaBank Shareholder Approval are obtained. The costs related to the Proxy Solicitation and Information Agent will be borne by PWC and VersaBank. All other costs related to soliciting proxies and printing and mailing this PWC Circular and the Joint Disclosure Booklet in connection with the PWC Meetings will be borne by PWC. PWC intends to pay for Intermediaries to deliver proxy-related materials and the Form 54-101F7 (the request for voting instructions) to “objecting beneficial owners”, in accordance with NI 54-101.

Voting By Registered PWC Securityholders

The following instructions are for Registered PWC Securityholders only. If you are a Beneficial PWC Securityholder, please see “Information Concerning the Meetings - Voting by Beneficial PWC Securityholders” below and follow your Intermediary’s instructions on how to vote your PWC Common Shares, PWC Class B Preferred Shares and PWC Series C Notes.

You are a Registered PWC Securityholder if you have one or more PWC Security certificates and such PWC Security certificates are registered in your name. If you are a Registered PWC Securityholder, a proxy form has been mailed to you together with this PWC Circular and the Joint Disclosure Booklet. You may receive more than one set of voting materials and multiple proxy forms if you hold multiple types of PWC Securities. If you receive multiple proxy forms, please complete, sign, date and return each proxy form that you receive or otherwise follow the voting instructions set forth in this PWC Circular to ensure that you vote every PWC Security that you hold.

Voting in Person

Registered PWC Securityholders as at the Record Date who attend the PWC Common Shareholders Meeting, the PWC Class B Preferred Shareholders Meeting or the PWC Series C Noteholders Meeting may vote in person. Registered PWC Securityholders as at the Record Date who plan to attend the PWC Meetings and wish to vote their PWC Common Shares, PWC Class B Preferred Shares and PWC Series C Notes in person, should not complete or return the form(s) of proxy. Their votes will be taken and counted at the applicable PWC Meeting(s). Such Registered PWC Securityholders are to register with the Transfer Agent upon their arrival at the applicable PWC Meeting(s).

Voting by Proxy

If you are a Registered PWC Securityholder as at the Record Date but do not plan to attend the PWC Meetings, you may vote by using a proxy to appoint someone to attend the PWC Meetings as your

proxyholder. You may receive more than one set of voting materials and multiple proxy forms if you hold multiple types of PWC Securities. If you receive multiple proxy forms, please complete, sign, date and return each proxy form that you receive or otherwise follow the voting instructions set forth in this PWC Circular to ensure that you vote every PWC Security that you hold.

You should complete and return the proxy form(s) accompanying this PWC Circular as instructed and by no later than 10:30 a.m. (Toronto time) on December 28, 2016 (or no later than 48 hours, excluding Saturday, Sundays and holidays, before any reconvened meeting if the applicable PWC Meeting is adjourned or postponed). Either you, or your duly authorized attorney (the authorization must be in writing), must sign the proxy form. The time limit for deposit of proxies may be waived or extended by the chair of each of the PWC Meetings at his or her discretion, without notice.

Appointment of Proxies

The persons named in the enclosed form(s) of proxy are directors and officers of PWC. AS A PWC SECURITYHOLDER, YOU HAVE THE RIGHT TO APPOINT A PERSON, WHO NEED NOT BE A PWC SECURITYHOLDER, AS YOUR NOMINEE TO ATTEND AND ACT FOR YOU ON YOUR BEHALF AT THE APPLICABLE PWC MEETINGS, OTHER THAN THE PERSONS DESIGNATED IN THE ENCLOSED FORM OF PROXY. This right may be exercised by inserting such person’s name in the blank space provided in the form(s) of proxy. Proxies are to be returned to Computershare Investor Services Inc. in accordance with the instructions provided on the form(s) of proxy. IF YOU APPOINT A NON-MANAGEMENT PROXYHOLDER, PLEASE MAKE THEM AWARE AND ENSURE THEY WILL ATTEND THE APPLICABLE PWC MEETING(S) FOR THE VOTE TO COUNT.

How do I Appoint a Proxyholder?

Your proxyholder is the person you appoint to cast your votes for you at the PWC Meetings. The persons named in the enclosed form(s) of proxy are directors or officers of PWC. You are entitled to appoint a person (who need not be a PWC Securityholder) other than the individuals named in the enclosed form(s) of proxy to represent such PWC Securityholder at the PWC Meetings. If you want to authorize a director or officer of PWC named in the enclosed form(s) of proxy as your proxyholder, please leave the line near the top of the proxy form blank, as their names are pre-printed on the form. If you want to authorize another person as your proxyholder, fill in that person’s name in the blank space located near the top of the enclosed proxy form(s). IF YOU APPOINT A NON-MANAGEMENT PROXYHOLDER PLEASE MAKE THEM AWARE AND ENSURE THEY WILL ATTEND THE APPLICABLE PWC MEETING(S) FOR THE VOTE TO COUNT.

Your proxy authorizes the proxyholder to vote and otherwise act for you at the PWC Meetings, including any continuation of such PWC Meetings that may occur if any of the PWC Meetings are adjourned.

How Will a Proxyholder Vote?

The PWC Common Shares, PWC Class B Preferred Shares and PWC Series C Notes represented by proxies will be voted in favour or voted against the PWC Common Shareholders Resolution, PWC Class B Preferred Shareholders Resolution and PWC Series C Noteholders Resolution, respectively, by the persons designated in the proxies in accordance with the direction of the holders of PWC Common Shares, PWC Class B Preferred Shares and PWC Series C Notes

appointing them. In the event that no specification is made in the proxies, the PWC Common Shares, PWC Class B Preferred Shares and the PWC Series C Notes represented by proxies in favour of management nominees will be voted FOR the PWC Common Shareholders Resolution, the PWC Class B Preferred Shareholders Resolution and the PWC Series C Noteholders Resolution, respectively.

The enclosed form(s) of proxy confers a discretionary authority upon the named persons with respect to amendments and variations to matters identified in the accompanying notice of special meeting of holders of PWC Common Shareholders, the notice of special meeting of PWC Class B Preferred Shareholders and the notice of meeting of PWC Series C Noteholders, and with respect to other matters that may properly come before the PWC Meetings. At the time of the preparation of this PWC Circular and the Joint Disclosure Booklet, management of PWC knows of no such amendments, variations or other matters to come before the PWC Meetings. If, however, amendments, variations or other matters which are not now known to management of PWC should properly come before the PWC Meetings, the PWC Common Shares, PWC Class B Preferred Shares and PWC Series C Notes represented by proxy will be voted by the persons named in the form of proxy in accordance with their best judgment.

How Do I Deposit a Proxy?

Registered holders of PWC Common Shares and PWC Class B Preferred Shares are encouraged to complete the form of proxy and return it to Computershare Investor Services Inc. in accordance with the instructions provided in the form(s) of proxy, whether or not you plan to attend the PWC Common Shareholders Meeting or the PWC Class B Preferred Shareholders Meeting.

Registered holders of PWC Series C Notes are encouraged to complete the form of proxy and return it to Computershare Trust Company of Canada in accordance with the instructions provided in the form of proxy, whether or not you plan to attend the PWC Series C Noteholders Meeting.

How Do I Revoke My Proxy?

A proxy is only valid at the applicable PWC Meeting(s) in respect of which it is given or any postponement or adjournment thereof.

A PWC Common Shareholder or a PWC Class B Preferred Shareholder may revoke a proxy:

(a) by an instrument in writing executed by the PWC Common Shareholders or PWC Class B Preferred Shareholders, as applicable, or by an attorney in writing or, if the PWC Common Shareholder or PWC Class B Preferred Shareholder is a corporation, under its corporate seal or by an officer or attorney thereof duly authorized, and deposited:

(b) in any other manner permitted by law.

A PWC Series C Noteholder may revoke a proxy:

(ii) with the chair of the PWC Series C Noteholders Meeting on December 30, 2016 or any postponement or adjournment of the PWC Series C Noteholders Meeting; or

(b) in any other manner permitted by law.

Voting By Beneficial PWC Securityholders

You are a Beneficial PWC Securityholder (as opposed to a Registered PWC Securityholder) if your PWC Common Shares, PWC Class B Preferred Shares or PWC Series C Notes are held on your behalf, or for your account, by an Intermediary, such as a broker, an investment dealer, a bank or a trust company. The information in this section is of significant importance to a substantial number of PWC Securityholders who do not hold their PWC Securities in their own name, but who hold their PWC Securities through an Intermediary.

If your PWC Common Shares, PWC Class B Preferred Shares or PWC Series C Notes are not registered in your name, then such PWC Common Shares, PWC Class B Preferred Shares or PWC Series C Notes will likely be registered in the name of your Intermediary. PWC Common Shares, PWC Class B Preferred Shares or PWC Series C Notes held by Intermediaries can only be voted for or against the PWC Common Shareholders Resolution, PWC Class B Preferred Shareholders Resolution and PWC Series C Noteholders Resolution upon the instructions of the Beneficial PWC Securityholders, therefore, your Intermediary is required to seek your instructions as to how to vote your PWC Securities. For that reason, if you are a Beneficial PWC Securityholder, you will have received this PWC Circular and the Joint Disclosure Booklet from your Intermediary along with the applicable voting instruction form(s) depending on the type of PWC Securities you hold. You may receive more than one set of voting materials and multiple proxy forms or voting instruction forms if you hold multiple types of PWC Securities. If you receive multiple proxy forms or voting instruction forms, please complete, sign, date and return each proxy form or voting instruction form that you receive to ensure that you vote every PWC Security that you hold.

Every Intermediary has its own mailing procedures and provides its own return instructions, which Beneficial PWC Securityholders should follow closely in order to ensure that their PWC Securities are voted at the applicable PWC Meeting(s). A Beneficial PWC Securityholder may have received from the Intermediary either a request for voting instructions or a form of proxy that is identical to the form of proxy provided to Registered PWC Securityholders; however, the purpose of the proxy is limited to instructing the Intermediary how to vote on behalf of the Beneficial PWC Securityholder. A BENEFICIAL PWC SECURITYHOLDER THAT RECEIVES A PROXY FROM AN INTERMEDIARY CANNOT USE THAT PROXY TO VOTE PWC COMMON SHARE, PWC CLASS B PREFERRED SHARES AND PWC

SERIES C NOTES DIRECTLY AT THE PWC MEETINGS. The proxy must be returned to the Intermediary well in advance of the PWC Meetings in order to have the PWC Securities voted.

A Beneficial PWC Securityholder who wishes to vote in person at the applicable PWC Meeting(s) or have its nominee vote in person at the applicable PWC Meeting(s) must provide the Intermediary with the appropriate documentation in order to be appointed as proxyholder. A Beneficial PWC Securityholder should contact the Intermediary to determine which documentation the Intermediary requires in order for it or its nominee to be appointed proxyholder. ONLY AFTER THE INTERMEDIARY APPOINTS THE BENEFICIAL PWC SECURITYHOLDER OR ITS NOMINEE AS A PROXYHOLDER CAN THAT BENEFICIAL PWC SECURITYHOLDER OR ITS NOMINEE VOTE SHARES DIRECTLY AT THE APPLICABLE PWC MEETING(S). IF YOU APPOINT A NON-MANAGEMENT PROXYHOLDER PLEASE MAKE THEM AWARE AND ENSURE THEY WILL ATTEND THE APPLICABLE PWC MEETING(S) FOR THE VOTE TO COUNT.

PWC may utilize the Broadridge QuickVote™ service to assist Beneficial PWC Securityholders with voting their PWC Securities over the telephone. Alternatively, Kingsdale Shareholder Services may contact such Beneficial PWC Securityholders to assist them with conveniently voting their PWC Securities directly over the phone. If you have any questions about the PWC Meetings, please contact Kingsdale Shareholder Services by telephone at 1-877-659-1819 (toll-free in North America) or 1-416-867-2272 (collect outside North America) or by email at contactus@kingsdaleshareholder.com.

PARTICULARS OF THE TRANSACTION

Background to the Transaction

In late February 2016, having regard to PWC’s mid and long-term dividend and interest obligations, the PWC Board determined it prudent to consider its various strategic alternatives. Such strategic alternatives included, among other things, consideration of various financing and refinancing alternatives, if any; the possible sale of PWC’s principal asset, namely all or substantially all of the VersaBank Common Shares held by PWC; and a possible merger or other strategic transaction involving VersaBank.

On March 1, 2016, the PWC Board advised the VersaBank Board of its intention to consider its strategic alternatives. Given the implications to VersaBank of many of the strategic alternatives, arising from the fact that PWC currently owns approximately 62.8% of the outstanding VersaBank Common Shares, both the PWC Board and VersaBank Board determined and agreed that it would be in their respective best interests to cooperate in assessing their respective strategic alternatives, while independently considering any other such alternatives as may be available to them respectively.

To facilitate these efforts, and having regard to (among other things) the foregoing, each subsequently formed special committees of their respective independent directors. The VersaBank Independent Committee was comprised of Messrs. Litton, Hillier, Carter and Brabander. The PWC Independent Committee was initially comprised of Messrs. Wilson and Mitchell and, upon the expiry of Mr. Mitchell’s term as a director of PWC at the end of the 2016 annual general and special meeting of PWC Common Shareholders, Mr. Mitchell was replaced by Mr. Dagnone.

On March 2, 2016, the VersaBank Independent Committee retained RBC Dominion Securities Inc., a member company of RBC Capital Markets (“RBC”) as its independent financial advisor, and on March 9, 2016, retained Cassels Brock & Blackwell LLP (“CBB”) as its independent legal counsel. On or about March 8, 2016, the PWC Independent Committee likewise retained Crosbie & Company Inc. (“Crosbie”) as its independent financial advisor, and Borden Ladner Gervais LLP (“BLG”) as its independent legal counsel.

On March 7, 2016, VersaBank and PWC jointly announced that they had initiated a process to review strategic alternatives.

On March 11, 2016, a joint meeting of the VersaBank Independent Committee and PWC Independent Committee was held to discuss the process by which the entities would cooperate in exploring strategic alternatives, including in particular the exploration of third party interest in an acquisition of VersaBank. Following this meeting, separate meetings of each of the VersaBank Independent Committee and PWC Independent Committee were held.

Following the announcement by VersaBank and PWC that they had initiated a process to review strategic alternatives, RBC contacted and held discussions with a broad range of parties in respect of a potential acquisition of VersaBank. Interested parties that executed a non-disclosure agreement were provided with certain non-public information and an initial process letter, which invited each party to make a preliminary confidential non-binding expression of interest to RBC. Confidential non-binding expressions of interest from various interested parties were received in early June 2016.

During this same period, the VersaBank Independent Committee met on a number of occasions, and held numerous informal meetings and conversations, to continue its mandate. Similarly, the PWC Independent Committee met on a number of occasions, and held numerous informal meetings and conversations, to continue its mandate.

On June 13, 2016, the VersaBank Independent Committee and the PWC Independent Committee held a joint meeting to receive a presentation from RBC on the confidential non-binding expressions of interest received. Following this meeting, separate meetings of each of the VersaBank Independent Committee and PWC Independent Committee were held.

Between June 15 and June 19, 2016, the PWC Independent Committee and the PWC Board met formally and informally on a number of occasions to consider further the non-binding expressions of interest received. Ultimately, after careful consideration, and taking into consideration the advice of its financial advisors, including as to the unlikelihood that any of the interested parties would enhance their expressions of interest sufficiently to warrant pursuing a sale as a possible strategic alternative, and its understanding of the views of certain members of the George family in this regard, the PWC Independent Committee advised the PWC Board that it considered the consideration implied by the various confidential non-binding expressions of interest to be insufficient. Mr. Patrick George, also a director of PWC, on behalf of himself and certain of his family members who, directly or indirectly, beneficially own or control approximately 39.2% of the outstanding PWC Common Shares, advised that they were of a similar view and would similarly not be supportive of pursuing any such transaction.

On June 16, 2016, the VersaBank Independent Committee met to consider further the non-binding expressions of interest received. The VersaBank Independent Committee determined that it would be important to understand the perspective of PWC, the holder of approximately 62.8% of the outstanding VersaBank Common Shares, relative to the confidential expressions of interest before making any determination with respect thereto.

On June 20, 2016, the VersaBank Independent Committee and the PWC Independent Committee held a joint meeting. At this meeting, the PWC Independent Committee advised the VersaBank Independent Committee that it considered the consideration implied by the confidential non-binding expressions of interest insufficient, that Mr. George had come to a similar conclusion (speaking on behalf of himself and certain of his family members), and that they would therefore not be supportive of pursuing any such transaction. Each of the PWC Independent Committee and the VersaBank Independent Committee held separate meetings thereafter.

Having regard for the advice of the PWC Independent Committee as to the transactions contemplated by the confidential non-binding expressions of interest and that without the support of PWC no such transaction was capable of completion, and their common understanding as to the unlikelihood that any of the interested parties would sufficiently enhance its offered consideration, based on RBC’s assessment of the expressions of interest, both the PWC Independent Committee and the VersaBank Independent Committee concluded not to pursue such a strategic alternative at that time.

During the remainder of the summer of 2016, VersaBank and PWC continued to consider their various possible strategic alternatives with a view to achieving a result that would be in the best interests of each of the companies. PWC, in particular, considered possible transactions that should allow it to realize value for its other assets in addition to its VersaBank Common Shares. One of the alternatives considered was a transaction that should allow VersaBank to use the accumulated tax loss carry-forwards

of PWC. PWC has tax loss carry-forwards that are potentially available to offset future taxable income. These tax loss carry-forwards are currently of limited use to PWC, a holding company that does not have any taxable income, but could be more efficiently utilized by VersaBank. Management ultimately determined that an amalgamation of PWC and VersaBank should enable the amalgamated entity to make use of the tax loss carry-forwards of PWC, thereby enhancing the value of the combined entity. Given the regulatory framework within which VersaBank operates, management was of the view that completing a recapitalization of PWC, in order to simplify its capital structure and address its outstanding liabilities, would potentially facilitate obtaining the regulatory approvals necessary to complete an amalgamation of PWC and VersaBank.

Upon determining that an amalgamation of PWC and VersaBank was the structure most likely to benefit both PWC and VersaBank, management sought advice of PWC’s and VersaBank’s advisors in order to confirm that the proposed structure could be implemented.

Upon confirming that the proposed structure could be implemented, in August 2016 management commenced discussions with the VersaBank Independent Committee and the PWC Independent Committee regarding preliminary proposed terms of a transaction between PWC and VersaBank (the “Initially Proposed Transaction”). These proposed terms included the redemptions of the PWC Class A Preferred Shares and PWC 7.5% Notes for a cash payment in accordance with their terms, the acquisition by PWC, pursuant to a plan of arrangement under the CBCA, of the PWC Class B Preferred Shares and PWC Series C Notes in exchange for PWC Common Shares, the conversion of certain indebtedness owed by PWC into PWC Common Shares, and the amalgamation of PWC and VersaBank. The PWC Independent Committee also considered exchanging the PWC Class A Preferred Shares and the PWC 7.5% Notes for PWC Common Shares as part of the proposed recapitalization but determined that it was inappropriate to give the holders of PWC Class A Preferred Shares and PWC 7.5% Notes material influence over the success of the Initially Proposed Transaction given that the aggregate value of their securities comprised an immaterial amount in the context of the Initially Proposed Transaction. Following these initial discussions with management, both the VersaBank Independent Committee and the PWC Independent Committee continued to seek advice from their financial and legal advisors regarding the terms of the Initially Proposed Transaction.

Between September 2, 2016 and September 11, 2016, the independent committees and boards of each of VersaBank and PWC, respectively, each met and held discussions on a number of occasions to consider the Initially Proposed Transaction, and the impact that it would have on the respective stakeholders of VersaBank and PWC, with the benefit of advice from their independent financial and legal advisors. In addition, the PWC Independent Committee and the VersaBank Independent Committee confirmed with Mr. George that he and his family members would be supportive of the Initially Proposed Transaction should a decision be made to proceed.

On September 12, 2016, the PWC Board and PWC Independent Committee met with Crosbie and BLG to review the terms of the Initially Proposed Transaction. At this meeting, Crosbie provided its financial analysis in relation to the Initially Proposed Transaction, including as it related to the formal valuations of the PWC Common Shares and Bank Common Shares and its opinions, delivered orally that: (i) the PWC Recapitalization, the Debt Satisfaction and the consideration to be received pursuant to the Amalgamation by holders of PWC Common Shares is fair, from a financial point of view, to holders of PWC Common Shares, other than the Excluded Shareholders; (ii) the consideration to be received by holders of PWC Class B Preferred Shares pursuant to the PWC Recapitalization and the Amalgamation is fair, from a financial point of view, to such holders, other than the Excluded Shareholders; and (iii) the

consideration to be received by the holders of PWC Series C Notes pursuant to the PWC Recapitalization and the Amalgamation is fair, from a financial point of view, to such holders, other than the Excluded Shareholders. Following the presentation by Crosbie, the PWC Independent Committee met independently to consider the Initially Proposed Transaction and unanimously resolved to recommend to the PWC Board that the PWC Board approve the Initially Proposed Transaction and recommend that PWC Securityholders vote in favour of the Initially Proposed Transaction.

After careful consideration of (among other matters) the factors set out under “Particulars of the Transaction - Reasons for and other Considerations in Relation to the Transaction” in this PWC Circular, and having received the benefit of the independent financial and legal advice of Crosbie and BLG, respectively, and upon the unanimous recommendation of the PWC Independent Committee, the PWC Board unanimously (with each of David Taylor, Paul Oliver, and Patrick George having disclosed his interest in the Initially Proposed Transaction and having each abstained from voting on the Initially Proposed Transaction) determined that the Initially Proposed Transaction was in the best interests of PWC and fair to PWC Securityholders, approved the entering into of the PWC Transaction Agreements and resolved to recommend that PWC Securityholders vote in favour of the Initially Proposed Transaction.

Also on September 12, 2016, the VersaBank Board met with RBC and CBB to review the terms of the Amalgamation (as then contemplated). At this meeting, RBC provided its financial analysis in relation to the Amalgamation (as then contemplated), including as it relates to its opinion, delivered orally (and thereafter in writing and appended as Appendix C to the VersaBank Circular) that, the Effective Consideration (as defined in the RBC Fairness Opinion) to be paid for the Incremental Net Assets (as defined in the RBC Fairness Opinion) under the Amalgamation (as then contemplated) is fair, from a financial point of view, to VersaBank. Following the presentation by RBC, the VersaBank Independent Committee met independently to consider the Amalgamation (as then contemplated) and unanimously resolved to recommend to the VersaBank Board that the VersaBank Board approve the Amalgamation (as then contemplated) and recommend that VersaBank Shareholders vote in favour of the Amalgamation Resolution.

After careful consideration of (among other matters) the factors set out under “Particulars of the Amalgamation - Reasons for the Amalgamation” in the VersaBank Circular, and having received the benefit of the independent financial and legal advice of RBC and CBB, respectively, and upon the unanimous recommendation of the VersaBank Independent Committee, the VersaBank Board unanimously (with each of David Taylor and Paul Oliver having disclosed his interest in the Amalgamation (as then contemplated) and having each abstained from voting on the Amalgamation (as then contemplated)) determined that the Amalgamation (as then contemplated) was in the best interests of VersaBank and fair to VersaBank Shareholders, approved the entering into of the VersaBank Transaction Agreements and resolved to recommend that VersaBank Shareholders vote in favour of the Amalgamation Resolution.

On September 12, 2016, VersaBank and PWC jointly announced the Initially Proposed Transaction, including the Amalgamation (as then contemplated).

Following the announcement of the Initially Proposed Transaction on September 12, 2016, VersaBank made application to OSFI for the required approval of the Amalgamation Agreement pursuant to section 225 of the Bank Act (Canada).

In early November 2016, after receiving the benefit of the views expressed by various stakeholders of PWC as well as a further review of management’s financial model, management, the PWC Independent Committee and its legal and financial advisors undertook a review of the indirect allocation among the PWC Common Shareholders, PWC Class B Preferred Shareholders and PWC Series C Noteholders of the number of Bank Common Shares to be issued pursuant to the Initially Proposed Transaction. After further considering the impact on each class of PWC Securities, the PWC Independent Committee determined to explore the implications of, among other things, the reallocation of approximately 400,000 Bank Shares to the PWC Series C Noteholders from those previously proposed to be allocated to the PWC Common Shareholders. The PWC Independent Committee also determined to explore the implications of completing the PWC Recapitalization by way of: (i) an amendment to the articles of PWC to change the PWC Class B Preferred Shares into PWC Common Shares, and (ii) an amendment to the Series C Indenture to exchange the PWC Series C Notes for PWC Common Shares. In doing so, the PWC Independent Committee considered the relative merits of completing the recapitalization by way of a plan of arrangement, as well as its potential disadvantages, including (among others) possible delays, and increased costs and uncertainties. The PWC Independent Committee also considered the fact that fundamental changes to the terms of the PWC Class B Preferred Shares and the PWC Series C Notes had previously been completed by way of amendments to the terms of the articles of PWC and the Series C Indenture, respectively. The PWC Independent Committee also considered that notwithstanding it was not required by the Series C Indenture or applicable law, the PWC Recapitalization would still provide for dissent rights for the holders of the PWC Series C Notes.

Between November 10, 2016 and November 14, 2016, the independent committees and boards of VersaBank and PWC each met to consider the proposed amended terms of the Transaction and its impact on VersaBank and PWC, respectively, taking into consideration the effect on the respective stakeholders of VersaBank and PWC, with the benefit of advice from their independent financial and legal advisors.

On November 15, 2016, the PWC Board and PWC Independent Committee met with Crosbie and BLG to review potential amendments to the PWC Transaction Agreements contemplating (among other things) the reallocation of approximately 400,000 Bank Common Shares to be issued pursuant to the Initially Proposed Transaction from the holders of PWC Common Shares to the holders of PWC Series C Notes. The PWC Board and PWC Independent Committee also considered the potential changes to the structuring of the PWC Recapitalization. At this meeting, the PWC Board and the PWC Independent Committee received the advice of Crosbie, including as it related to the formal valuations of the PWC Common Shares and Bank Common Shares and its opinions, delivered orally (and thereafter in writing and appended as Appendix E to this PWC Circular) that: (i) the PWC Recapitalization, the Debt Satisfaction and the consideration to be received pursuant to the Amalgamation by holders of PWC Common Shares is fair, from a financial point of view, to holders of PWC Common Shares, other than the Excluded Shareholders; (ii) the consideration to be received by holders of PWC Class B Preferred Shares pursuant to the PWC Recapitalization and the Amalgamation is fair, from a financial point of view, to such holders, other than the Excluded Shareholders; and (iii) the consideration to be received by the holders of PWC Series C Notes pursuant to the PWC Recapitalization and the Amalgamation is fair, from a financial point of view, to such holders, other than the Excluded Shareholders.

interest in the Transaction and having each abstained from voting on the Transaction) determined that the Transaction is in the best interests of PWC and fair to PWC Securityholders, approved the entering into of amendments to the PWC Transaction Agreements and resolved to recommend that PWC Securityholders vote in favour of the PWC Common Shareholders Resolution, the PWC Class B Preferred Shareholders Resolution and the PWC Series C Noteholders Resolution.

Also on November 15, 2016, the VersaBank Board met with RBC and CBB to review the proposed amendments to the VersaBank Transaction Agreements. At this meeting, RBC provided its summary of the proposed amendments to the VersaBank Transaction Agreements, and advised the VersaBank Board that there was no material change affecting the RBC Fairness Opinion after the date it was provided that would cause RBC to change or withdraw the RBC Fairness Opinion and the VersaBank Board could continue to rely on the RBC Fairness Opinion.

After careful consideration of (among other matters) the factors set out under “Particulars of the Amalgamation - Reasons for the Amalgamation” in the VersaBank Circular, and having received the benefit of the independent financial and legal advice of RBC and CBB, respectively, and upon the unanimous recommendation of the VersaBank Independent Committee, the VersaBank Board unanimously (with each of David Taylor and Paul Oliver having disclosed his interest in the Amalgamation and having each abstained from voting on the Amalgamation) determined that the Amalgamation is in the best interests of VersaBank and fair to VersaBank Shareholders, approved the entering into of the amendments to the VersaBank Transaction Agreements and resolved to recommend that VersaBank Shareholders vote in favour of the Amalgamation Resolution.

On November 15, 2016, upon receipt of OFSI’s approval of the Amalgamation Agreement pursuant to section 225 of the Bank Act (Canada), VersaBank and PWC jointly announced that they had entered into the amendments to the PWC Transaction Agreements and VersaBank Transaction Agreements, received OSFI’s approval of the Amalgamation Agreement and set the record date and meeting date for each of the PWC Meetings and the VersaBank Meeting.

Recommendation of the PWC Independent Committee

The PWC Board established the PWC Independent Committee to oversee the identification, development and evaluation of strategic alternatives for PWC and, among other things, to review and consider any proposed transaction and the impact on PWC stakeholders arising from the strategic review. Pursuant to this mandate, the PWC Independent Committee has reviewed the Transaction.

Crosbie has provided the PWC Board and the PWC Independent Committee with its opinions to the effect that, as of November 15, 2016 and subject to the assumptions, limitations and qualifications set forth in the Crosbie Fairness Opinions and Formal Valuations: (i) the PWC Recapitalization, the Debt Satisfaction and the consideration to be received pursuant to the Amalgamation by holders of PWC Common Shares is fair, from a financial point of view, to holders of PWC Common Shares, other than the Excluded Shareholders; (ii) the consideration to be received by holders of PWC Class B Preferred Shares pursuant to the PWC Recapitalization and the Amalgamation is fair, from a financial point of view, to such holders, other than the Excluded Shareholders; and (iii) the consideration to be received by the holders of PWC Series C Notes pursuant to the PWC Recapitalization and the Amalgamation is fair, from a financial point of view, to such holders, other than the Excluded Shareholders.

The PWC Independent Committee, having taken into account the Crosbie Fairness Opinions and Formal Valuations, and such other matters it considered relevant and after receiving legal and financial advice, unanimously recommended that the PWC Board approve the Transaction and recommend that PWC Securityholders vote FOR the PWC Common Shareholders Resolution, the PWC Class B Preferred Shareholders Resolution and the PWC Series C Noteholders Resolution, as applicable.

Recommendation of the PWC Board

After careful consideration and taking into account, among other things, the Crosbie Fairness Opinions and Formal Valuations, and the recommendation of the PWC Independent Committee, the PWC Board, after receiving legal and financial advice, has unanimously (with each of David Taylor, Paul Oliver, and Patrick George having disclosed his interest in the Transaction and having each abstained from voting on the Transaction) determined that the Transaction is in the best interests of PWC and fair to PWC Securityholders. Accordingly, the PWC Board unanimously recommends that PWC Securityholders vote FOR the PWC Common Shareholders Resolution, the PWC Class B Preferred Shareholders Resolution and the PWC Series C Noteholders Resolution, as applicable.

Each director and executive officer of PWC intends to vote all of his or her PWC Securities in favour of the PWC Common Shareholders Resolution, the PWC Class B Preferred Shareholders Resolution and the PWC Series C Noteholders Resolution.

Reasons for and other Considerations in Relation to the Transaction

In the course of the evaluation of the Transaction by the PWC Independent Committee and the PWC Board, the PWC Independent Committee and the PWC Board consulted with its senior management, its financial advisor, Crosbie, and considered a number of factors, including, among others, the following:

resulting from the tax loss carry-forwards to be between $11.4 million and $11.9 million based on the Bank’s projected utilization of such tax loss carry-forwards.

(c) Required Regulatory Approval. The Amalgamation Agreement has received the approval of the Superintendent under section 225 of the Bank Act (Canada) and the Amalgamation must be approved by the Minister under section 228 of the Bank Act (Canada). There is no assurance that the Superintendent would permit any other transaction, or other course of action, based on the implications for VersaBank of a transaction involving its significant shareholder.

(f) Fairness Opinions and Formal Valuation. The PWC Board and the PWC Independent Committee received the Crosbie Fairness Opinions and Formal Valuations which state that, as of November 15, 2016 and subject to the assumptions, limitations and qualifications set forth in the Crosbie Fairness Opinions and Formal Valuations: (i) the PWC Recapitalization, the Debt Satisfaction and the consideration to be received pursuant to the Amalgamation by holders of PWC Common Shares is fair, from a financial point of view, to holders of PWC Common Shares, other than the Excluded Shareholders; (ii) the consideration to be received by holders of PWC Class B Preferred Shares pursuant to the PWC Recapitalization and the Amalgamation is fair, from a financial point of view, to such holders, other than the Excluded Shareholders; and (iii) the consideration to be received by the holders of PWC Series C Notes pursuant to the PWC Recapitalization and the Amalgamation is fair, from a financial point of view, to such holders, other than the Excluded Shareholders. In addition, Crosbie, under the supervision of the PWC Independent Committee, prepared formal written valuations of the PWC Common Shares and of the Bank Common Shares to be received by holders of PWC Common Shares pursuant to the Amalgamation. Subject to the assumptions, limitations and qualifications set forth in the Crosbie Fairness Opinions and Formal Valuations, Crosbie is of the opinion that, as of November 15, 2016, the fair market value of the PWC Common Shares is in the range of $0.05 to $0.49 per PWC Common Share and the fair market value of the Bank Common Shares is in the range of $6.24 to $7.97 per Bank Common Share.

(h) Treatment of PWC Class A Preferred Shares and PWC 7.5% Notes. The PWC Board considered whether the PWC Recapitalization should include an exchange of the PWC Class A Preferred Shares and the PWC 7.5% Notes for PWC Common Shares. The PWC Board ultimately determined that it was inappropriate to give the holders of PWC Class A Preferred Shares and PWC 7.5% Notes material influence over the success of the Transaction given that the aggregate value of their securities is immaterial in the context of the Transaction.

(j) Value to be Received by the Holders of PWC Class B Preferred Shares. The PWC Board considered that the value range for the Bank Common Shares indirectly issued to PWC Class B Preferred Shareholders pursuant to the Transaction, as outlined in the Crosbie Fairness Opinions and Formal Valuations, includes amounts that are greater than the market price of the PWC Class B Preferred Shares as of the date of the announcement of the Initially Proposed Transaction on September 12, 2016 and the announcement of the amended terms of the Transaction on November 15, 2016.

(k) Value to be Received by the Holders of PWC Common Shares. The PWC Board considered that the value range for the Bank Common Shares indirectly issued to PWC Common Shareholders, as outlined in the Crosbie Fairness Opinions and Formal Valuations, includes values that are equal to or greater than the market price of the PWC Common Shares as of the date of the announcement of the amended terms of the Transaction on November 15, 2016. The PWC Board also considered that in the absence of the Amalgamation, which requires approval by the PWC Common Shareholders, the tax loss carry-forwards of PWC would not be available to the Bank and it is unlikely that material value would be realized for such tax loss carry-forwards. Alternatives to the Transaction, including a distribution or transfer of PWC’s assets to holders of PWC Securities, would result in the value of the tax loss carry-forwards being lost.

Accordingly, the holders of PWC Common Shares should receive a portion of the value attributable to the tax loss carry-forwards of PWC given that other classes of PWC Securities are also expected to benefit from such value.

(l) Compliance with Terms of the Series C Indenture. The PWC Board considered the fact that the PWC Series C Amendments will be sought in accordance with the terms of the PWC Series C Indenture governing the rights of the holders of PWC Series C Notes. The Series C Indenture expressly contemplates that modifications of, or changes in, the provisions of the Series C Indenture require the approval of not less than 662/3% of the votes given on a poll at a meeting of all PWC Series C Noteholders. In the past, PWC has amended fundamental terms of the Series C Indenture by way of an amendment to the Series C Indenture in the same manner as is contemplated in the present circumstances.

(m) Previous Amendments to the PWC Class B Preferred Shares. The PWC Board considered the fact that, in the past, PWC has amended the terms of the PWC Class B Preferred Shares by way of articles of amendment, including to amend the amount of the dividend and offer limited redemption rights, in the same manner as is contemplated in the present circumstances.

(r) Required Securityholder Approval. The PWC Board considered that 662/3% of the votes cast by the holders of each of the PWC Common Shares, PWC Class B Preferred Shares and PWC Series C Notes must approve their respective resolution, as well as “minority approval” by the holders of PWC Common Shares pursuant to MI 61-101.

(s) Dissent Rights. PWC Common Shareholders, PWC Class B Preferred Shareholders and PWC Series C Noteholders have been provided with the right to exercise Dissent Rights.

(t) The Terms of the Pre-Amalgamation Agreement. Under the Pre-Amalgamation Agreement, the PWC Board remains able to respond, in accordance with its fiduciary duties, to unsolicited Acquisition Proposals that constitute or could reasonably be expected to constitute or lead to a Superior Proposal. In addition, no termination fee is payable by PWC in connection with the termination of the Pre-Amalgamation Agreement or the Amalgamation Agreement.

In the course of its deliberations, the PWC Independent Committee and the PWC Board also identified and considered a variety of risks (as described in greater detail under “Risk Factors”) and potentially negative factors in connection with the Transaction, or a failure to complete the Transaction, including, but not limited to:

(a) the expected benefits of the Transaction may not be realized or, if realized, may not be recognized by capital markets;

(b) if the Pre-Amalgamation Agreement is terminated and the PWC Board decides or is required to seek another transaction, there is no assurance that PWC will be able to identify a transaction on terms as favourable to the PWC Securityholders as those under the Transaction;

(c) if the Pre-Amalgamation Agreement is terminated, the market price of the PWC Securities may decline to the extent that the market price currently reflects a market assumption that the Transaction will be completed; and

(d) if the Pre-Amalgamation Agreement is terminated, PWC would remain liable for significant costs relating to the Transaction, including, among others, legal, accounting, financial advisory and financial printing expenses.

The PWC Board’s reasons for recommending the Transaction include certain assumptions relating to forward-looking information, and such information and assumptions are subject to various risks. See “Forward-Looking Information” and “Risk Factors”.

The foregoing discussion of certain of the factors considered by the PWC Independent Committee and the PWC Board is not intended to be exhaustive. In view of the wide variety of factors considered in connection with their evaluation of the Transaction, the PWC Independent Committee and the PWC Board did not find it practicable to, and did not quantify or otherwise attempt to assign relative weight to specific factors in reaching their determination. In addition, individual members of the PWC Independent Committee and the PWC Board may have given different weight to different factors.

Crosbie Fairness Opinions and Formal Valuations

Crosbie was retained effective on or about March 8, 2016 to assist the PWC Independent Committee in connection with a review of strategic options for PWC, which engagement was formalized in an engagement letter dated March 24, 2016. The engagement letter was amended on September 2, 2016 and further amended on November 11, 2016 and required that Crosbie provide the Crosbie Fairness Opinions and Formal Valuations with respect to the proposed Transaction (the original engagement letter

together with the amendments, the “Crosbie Engagement Letter”). The Crosbie Engagement Letter specifies that Crosbie will be paid fixed fees for the Crosbie Fairness Opinions and Formal Valuations and associated services. The fees paid to Crosbie are in no way contingent on the completion of the Transaction or Crosbie’s conclusions. In addition, PWC agreed to reimburse Crosbie for its reasonable out-of-pocket expenses and to indemnify Crosbie in respect of certain liabilities that might arise in connection with its engagement.

Crosbie is a Canadian-based specialty investment banking firm providing advisory services in relation to mergers, acquisitions, divestitures, debt and equity private placements, financial and corporate restructuring, management and employee buyouts, business and securities valuations and fairness and regulatory opinions. Crosbie is independent of all Interested Parties to the Transaction, in accordance with the requirements of MI 61-101. Neither Crosbie nor any of its affiliated entities, as defined in MI 61-101: (a) is an associated or affiliated entity or issuer insider (as such terms are defined for the purposes of MI 61-101) of any Interested Party; (b) is an advisor to any Interested Party in connection with the Transaction; (c) is a manager or co-manager of a soliciting dealer group for the Transaction (or a member of a soliciting dealer group for the Transaction providing services beyond the customary soliciting dealer’s functions or receiving more than the per security or per security holder fees payable to the other members of the group); (d) is the external auditor of PWC or any Interested Party; or (e) will receive compensation that will depend in whole or in part on the conclusions reached in the Crosbie Fairness Opinions and Formal Valuations or the outcome of the Transaction or has any financial interest in the completion of the Transaction. Based on the foregoing, Crosbie has been determined to be qualified and independent for the purposes of MI 61-101 in providing the Crosbie Fairness Opinions and Formal Valuations.

Crosbie’s only other engagement by PWC or VersaBank during the last 24 months was as an independent financial advisor to a special committee of the PWC Board on March 2, 2015 in connection with proposed amendments to the terms of PWC Class B Preferred Shares. Crosbie provided separate opinions as to the fairness, from a financial point of view, of that transaction to the holders of PWC Class B Preferred Shares and PWC Common Shares.

Neither PWC nor any director or senior officer of PWC, after reasonably inquiry, is aware of any “prior valuation” (as defined in MI 61-101) of PWC having been prepared in the past 24 months.

At the meeting of the PWC Board on November 15, 2016, Crosbie delivered orally, and, subsequently confirmed in writing, the Crosbie Fairness Opinions and Formal Valuations. The following brief summary of the conclusions of the Crosbie Fairness Opinions and Formal Valuations is qualified in its entirety by reference to the full text of the Crosbie Fairness Opinions and Formal Valuations attached as Appendix E to this PWC Circular. Such opinions are to the effect that, as of the date of such opinions and based on and subject to the assumptions, limitations and qualifications set forth therein: (i) the PWC Recapitalization, the Debt Satisfaction and the consideration to be received pursuant to the Amalgamation by holders of PWC Common Shares is fair, from a financial point of view, to holders of PWC Common Shares, other than the Excluded Shareholders; (ii) the consideration to be received by holders of PWC Class B Preferred Shares pursuant to the PWC Recapitalization and the Amalgamation is fair, from a financial point of view, to such holders, other than the Excluded Shareholders; and (iii) the consideration to be received by the holders of PWC Series C Notes pursuant to the PWC Recapitalization and the Amalgamation is fair, from a financial point of view, to such holders, other than the Excluded Shareholders.

In addition, Crosbie, under the supervision of the PWC Independent Committee, prepared formal written valuations of the PWC Common Shares and of the Bank Common Shares to be received by holders of PWC Common Shares pursuant to the Amalgamation. Subject to the assumptions, limitations and qualifications set forth in the Crosbie Fairness Opinions and Formal Valuations, Crosbie is of the opinion that, as of November 15, 2016, the fair market value of the PWC Common Shares is in the range of $0.05 to $0.49 per PWC Common Share and the fair market value of the Bank Common Shares is in the range of $6.24 to $7.97 per Bank Common Share.

The full text of the Crosbie Fairness Opinions and Formal Valuations, which sets forth among other things, the assumptions made, matters considered, information reviewed and limitations and qualifications on the review undertaken by Crosbie in connection therewith, is attached as Appendix E. The Crosbie Fairness Opinions and Formal Valuations were provided solely for the use of the PWC Independent Committee and the PWC Board in connection with their consideration of the Transaction and is not a recommendation as to how PWC Securityholders should vote in respect of the PWC Common Shareholders Resolution, the PWC Class B Preferred Shareholders Resolution and the PWC Series C Noteholders Resolution. PWC Securityholders are encouraged to read the full text of the Crosbie Fairness Opinions and Formal Valuations.

The Transaction

The Transaction consists of the following transactions, all of which are intended to be effective on the Effective Date (other than the Redemptions which may be completed prior to, but no later than, the Effective Date) and to occur sequentially in the following order (however, if it is necessary or desirable to complete such transactions in a different order, such different sequencing may occur):

(a) the waiver by the holders of the PWC Series C Notes of interest payments thereon while the Pre-Amalgamation Agreement is in force;

(b) the redemption of the PWC Class A Preferred Shares and the 7.5% notes maturing on March 31, 2017 of PWC (the “PWC 7.5% Notes”), for a cash payment in accordance with their terms (collectively, the “Redemptions”);

(i) the change of the PWC Class B Preferred Shares into PWC Common Shares, in each case subject to any exercise of PWC Class B Dissent Rights by holders of PWC Class B Preferred Shares, to be effected pursuant to an amendment to the articles of PWC; and

(ii) the exchange of the PWC Series C Notes for PWC Common Shares, in each case subject to any exercise of PWC Series C Dissent Rights by holders of PWC Series C Notes, to be effected pursuant to an amendment to the Series C Indenture;

(d) the Debt Satisfaction, to be effected pursuant to the Debt Satisfaction Agreement;

(e) the issuance by PWC to holders of PWC DSUs of PWC Common Shares in satisfaction of such PWC DSUs; and

(f) the Amalgamation of PWC and VersaBank, subject to any exercise of PWC Common Share Dissent Rights by holders of PWC Common Shares, pursuant to the Amalgamation Agreement and the issuance of letters patent of amalgamation pursuant to the Bank Act (Canada).

Each of the Transaction steps noted in clauses (b), (c), (d) and (e) is conditional upon the occurrence of all other Transaction steps other than the Amalgamation, and the Amalgamation is conditional upon the occurrence of all other Transaction steps and is described in more detail below. Prior to the Transaction becoming effective PWC will repay all amounts outstanding under the CWG/PWG Facility.

PWC Series C Notes Interest Payment Waiver

At the PWC Series C Noteholders Meeting and as part of the PWC Series C Noteholders Resolution, PWC Series C Noteholders will be asked to consider and, if deemed advisable, approve an interest payment waiver with respect to PWC Series C Notes (the “Interest Payment Waiver”). Specifically, in accordance with section 8.09(2) of the Series C Note Indenture, PWC Series C Noteholders will be asked to agree to modify and waive their right to receive any interest payments that become due and payable while the Pre-Amalgamation Agreement is in force, including, for certainty, the interest payment due and payable on December 31, 2016. The Interest Payment Waiver must be approved by not less than 662/3% of the votes cast by the PWC Series C Noteholders in person or by proxy at the PWC Series C Noteholders Meeting. The Interest Payment Waiver will authorize PWC and the trustee under the Series C Note Indenture to enter into any necessary documentation, including a supplemental indenture, evidencing such modification and waiver; however the Interest Payment Waiver will be effective upon the approval of the PWC Series C Noteholders Resolution and will be effective regardless of whether a supplemental indenture is entered into.

The Redemptions

PWC intends to redeem its non-voting, non-participating PWC Class A Preferred Shares and the PWC 7.5% Notes for a cash payment in accordance with their terms.

The following description of certain provisions of the redemption process applicable to the PWC Class A Preferred Shareholders and holders of PWC 7.5% Notes is a summary only, is not comprehensive and is qualified in its entirety by the terms of the PWC Class A Preferred Shares and PWC 7.5% Notes. A description of the terms of PWC Class A Preferred Shares is available in the PWC Annual Information Form which can be found under PWC’s profile on SEDAR at www.sedar.com. Further details regarding the Redemptions will be sent to the holders of PWC Class A Preferred Shares and PWC 7.5% Notes separately.

PWC Class A Preferred Shares

All of the issued and outstanding PWC Class A Preferred Shares will be redeemed by PWC by the payment of the issue price for each share, together with an amount equal to all accrued and unpaid cumulative preferential dividends thereon calculated to, but excluding, the date on which such shares are redeemed (the “PWC Class A Redemption Price”). PWC will send a notice (the “PWC Class A Notice of Redemption”) to the PWC Class A Preferred Shareholders, in accordance with their terms, not less than 30 days and not more than 60 days before the date of the redemption of the Class A Preferred Shares. It is anticipated that the redemption of the PWC Class A Preferred Shares will be for an aggregate amount of approximately $1,015,206 assuming a redemption date of January 31, 2017.

From and after the date on which the redemption of the Class A Preferred Shares is completed and upon payment of the PWC Class A Redemption Price, all of the issued and outstanding PWC Class A Preferred Shares shall cease to be entitled to dividends or any other participation in the assets of PWC and the holders thereof shall not be entitled to exercise any of their other rights as shareholders in respect thereof.

On or following the Redemption, the PWC Class A Preferred Shares will be de-listed from the TSX.

PWC 7.5% Notes

In order to redeem the PWC 7.5% Notes in accordance with their terms, PWC will pay a price equal to 103% of the principal amount of each PWC 7.5% Note, plus accrued and unpaid interest thereon up to the date of redemption (“PWC 7.5% Note Redemption Price”). From and after the date on which the redemption of the PWC 7.5% Notes is completed and upon payment of the PWC 7.5% Note Redemption Price, holders of the PWC 7.5% Notes shall cease to be entitled to payment of any interest or principal amount and shall not be entitled to exercise any of their other rights pursuant to the PWC 7.5% Note. It is anticipated that the redemption of the PWC 7.5% Notes will be for an aggregate amount of approximately $1,007,787 assuming a redemption date of January 31, 2017.

PWC Recapitalization

The following description of the PWC Recapitalization is a summary only, is not comprehensive and is qualified in its entirety by reference to the full text of the PWC Class B Articles of Amendment and the PWC Supplemental Indenture, which are respectively attached as Appendix F and G to this PWC Circular. The PWC Recapitalization will be effected by completing the PWC Class B Amendment and the PWC Series C Amendment, as more fully described below.

PWC Class B Amendment

To give effect to the PWC Class B Amendment, PWC intends to file articles of amendment (the “PWC Class B Articles of Amendment”) at or prior to the Effective Time in accordance with section 173 of the Canada Business Corporations Act. Pursuant to the PWC Class B Amendment, each PWC Class B Preferred Share outstanding at the Effective Time (other than PWC Class B Preferred Shares with respect to which PWC Class B Dissent Rights have been validly exercised) will be changed into PWC Common Shares (the “PWC Class B Exchange”) on the basis of 152.266 PWC Common Shares for each such PWC Class B Preferred Share (the “PWC Class B Consideration”). PWC shall not be required to deliver fractional PWC Common Shares in connection with the PWC Class B Exchange.

PWC Series C Amendment

To give effect to the PWC Series C Amendment, PWC intends to enter into the PWC Supplemental Indenture to supplement the Series C Indenture between PWC and Computershare Trust Company of Canada in accordance with section 8.09(2) of the Series C Indenture. Pursuant to the PWC Series C Amendment, the PWC Series C Notes outstanding at the Effective Time (other than PWC Series C Notes with respect to which PWC Series C Dissent Rights have been validly exercised) will be exchanged (the “PWC Series C Exchange”) on the basis of 7,468.211 PWC Common Shares for each $1,000 principal amount of PWC Series C Notes (the “PWC Series C Note Consideration”). PWC shall

not be required to deliver fractional PWC Common Shares in connection with the PWC Series C Exchange.

There are 1,094,058 PWC Class B Preferred Shares outstanding as of the date of this PWC Circular, of which 217 are held by 340268 and an aggregate of 2,049 are held by Patrick George, his brother William George, and his spouse, Christine George. PWC will issue up to a maximum of 166,588,602 PWC Common Shares in satisfaction of the PWC Class B Preferred Share Consideration, of which 33,041 PWC Common Shares will be issued to 340268 and an aggregate of 311,992 PWC Common Shares will be issued to Patrick George, his brother William George, and his spouse, Christine George.

There is $61,686,000 principal amount of PWC Series C Notes outstanding as of the date of this PWC Circular, of which $22,499,000 is held by 340268 and an aggregate of $8,824,000 is held by Patrick George, his brother William George, and his spouse, Christine George. PWC will issue up to a maximum of 460,684,102 PWC Common Shares in satisfaction of the PWC Series C Note Consideration, of which 168,027,279 PWC Common Shares will be issued to 340268 and an aggregate of 65,899,492 PWC Common Shares will be issued to Patrick George, his brother William George, and his spouse, Christine George.

The Debt Satisfaction

The following description of certain provisions of the debt satisfaction agreement entered into by PWC and 340268 on September 12, 2016, as amended on November 15, 2016 (the “Debt Satisfaction Agreement”) is a summary only, is not comprehensive and is qualified in its entirety by reference to the full text of the Debt Satisfaction Agreement, a copy of which was filed under PWC’s profile on SEDAR at www.sedar.com.

PWC and 340268 are parties to a loan agreement dated October 29, 2015 as amended on March 1, 2016, a promissory note dated March 7, 2016, a loan facility dated September 12, 2016, as amended on November 15, 2016 (the “Loan Facility”) and a loan agreement dated October 26, 2016. As at November 15, 2016, 340268 held $8,250,000 of indebtedness of PWC. Pursuant to the Loan Facility, 340268 has agreed to make available to PWC up to an additional $3,345,000. In connection with the completion of the Transaction, it is anticipated that the Loan Facility will be fully drawn. Assuming that the Loan Facility is fully drawn by PWC, the total aggregate indebtedness owed by PWC to 340268 will be $11,595,000 (the “Aggregate Indebtedness”).

Subject to, but following completion of, the Redemptions and the PWC Recapitalization (but prior to the Amalgamation), pursuant to the Debt Satisfaction Agreement, 340268 has agreed to convert the Aggregate Indebtedness into PWC Common Shares. PWC has agreed to issue to or to the direction of 340268 approximately 7,103 PWC Common Shares per $1,000 of Aggregate Indebtedness (the “Satisfaction Shares”), in full satisfaction of the Aggregate Indebtedness, up to a maximum of 82,357,598 PWC Common Shares (assuming the Loan Facility is fully drawn).

Upon issuance of the Satisfaction Shares: (i) all loan agreements and promissory notes between PWC and 340268, including the Loan Facility, will be terminated and shall have no force and effect, (ii) 340268 will release all security interests in any property or assets of PWC, including any pledged securities, and (iii) a financing change statement will be filed to discharge any filings and registrations made under the Personal Property Security Act (Ontario) in respect of which 340268 is a secured party with respect to PWC.

While no determination has yet been made, PWC may draw down on the Loan Facility, in whole or in part, in the event that the Transaction is not completed.

PWC DSU Exchanges

Pursuant to the Pre-Amalgamation Agreement, PWC intends to enter into exchange agreements (the “PWC DSU Exchange Agreements”) with each holder of PWC DSUs pursuant to which each holder of PWC DSUs will agree to exchange each issued and outstanding PWC DSU for one (1) PWC Common Share immediately prior to the Effective Time. As of the Record Date, there were 160,660 PWC DSUs outstanding. If the Transaction is consummated, holders of PWC DSUs would be entitled to collectively receive 160,660 PWC Common Shares, in the aggregate, which PWC Common Shares will not be entitled to a vote at the PWC Common Shareholders Meeting.

The Amalgamation

The description of the Amalgamation Agreement, both below and elsewhere in this PWC Circular and the Joint Disclosure Booklet, is a summary only, is not exhaustive and is qualified in its entirety by reference to the terms of the Amalgamation Agreement, which is incorporated by reference herein and may be found on the SEDAR profiles of both PWC and VersaBank at www.sedar.com.

If the PWC Securityholder Approvals and the VersaBank Shareholder Approval are obtained at the PWC Meetings and the VersaBank Meeting, respectively, and if the other conditions set out in the Pre-Amalgamation Agreement and Amalgamation Agreement are either satisfied or waived, the Amalgamation will be effected in accordance with the Amalgamation Agreement.

On the Effective Date, the issued and outstanding VersaBank Common Shares, VersaBank Series 1 Preferred Shares, VersaBank Series 3 Preferred Shares, and PWC Common Shares (collectively, “Amalgamating Entities Shares”) shall automatically become (as more fully described below) fully paid and non-assessable shares of the Bank or, as more fully described below with respect to the VersaBank Common Shares currently held by PWC, shall be cancelled without any repayment of capital in respect thereof and the issued and outstanding PWC Options and VersaBank Options shall be converted into options to purchase Bank Common Shares, as follows:

(a) each issued and outstanding VersaBank Common Share shall become (without any further action on the part of the holder) one (1) Bank Common Share other than those VersaBank Common Shares held by PWC, which will be cancelled without any payment of capital in respect thereof;

(b) each issued and outstanding VersaBank Series 1 Preferred Share shall become (without any further action on the part of the holder) one (1) Bank Series 1 Preferred Share;

(c) each issued and outstanding VersaBank Series 3 Preferred Share shall become (without any further action on the part of the holder) one (1) Bank Series 3 Preferred Share;

(d) each issued and outstanding VersaBank Option shall be converted into an option to purchase one (1) Bank Common Share; provided that terms and conditions of an option to acquire Bank Common Shares, including the term to expiry, conditions to and manner of exercising, will be the same as the VersaBank Option for which it was exchanged, and shall be governed by the terms of the VersaBank Stock Option Plan and any document evidencing a VersaBank Option shall thereafter evidence and be deemed to evidence such option to acquire Bank Common Shares;

(e) in accordance with the PWC Stock Option Plan, each issued and outstanding PWC Option shall be converted into an option to purchase (1/54.508758) Bank Common Shares (each a “PWC Replacement Option”) (and when aggregated with the other similar PWC Replacement Options of a holder of such options resulting in a fraction of a Bank Common Share, they shall be rounded down to the nearest whole number of Bank Common Shares); the exercise price per Bank Common Share subject to PWC Replacement Options shall be an amount equal to the quotient obtained when (A) the exercise price per PWC Common Share subject to such PWC Option immediately before the Effective Time, is divided by (B) (1/54.508758), provided that the aggregate exercise price payable on any particular exercise of PWC Replacement Options shall be rounded up to the nearest whole cent.; all terms and conditions of a PWC Replacement Option, including the term to expiry, conditions to and manner of exercising, will be the same as the PWC Option for which it was exchanged, and shall be governed by the terms of the PWC Stock Option Plan and any document evidencing a PWC Option shall thereafter evidence and be deemed to evidence such PWC Replacement Option;

(f) each issued and outstanding PWC Common Share (other than PWC Common Shares with respect to which PWC Common Share Dissent Rights have been exercised, but including those issued under the PWC Recapitalization, the PWC DSU Exchange Agreements and the Debt Satisfaction) shall be converted into Bank Common Shares on the basis of 54.508758 PWC Common Shares for one (1) Bank Common Share; and

(g) each PWC Common Shareholder who validly exercises the PWC Common Share Dissent Rights shall cease to have any rights as a holder of PWC Common Shares other than the right to be paid by the Bank the fair value of the PWC Common Shares with respect to which PWC Common Share Dissent Rights have been exercised in accordance with section 190 of the CBCA.

If the aggregate number of Bank shares to which a holder of Amalgamating Entities Shares would otherwise be entitled would include a fractional share, then the number of Bank shares that such holder of Amalgamating Entities Shares is entitled to receive following the Effective Time shall be rounded down to the next whole number and no former holder of Amalgamating Entities Shares will be entitled to any compensation in respect of such fractional Bank share.

For a further summary of the Amalgamation Agreement and Pre-Amalgamation Agreement, please see “Schedule D — Summary of the Pre-Amalgamation Agreement and Amalgamation Agreement” in the Joint Disclosure Booklet.

Effective Date

The Transaction, other than the Redemptions (which may be completed prior to, but no later than, the Effective Date), will become effective on: (i) the date shown on the PWC Class B Articles of Amendment; (ii) the date as set out in the PWC Supplemental Indenture giving effect to the PWC Series C Exchange; (iii) the date on which the transactions contemplated by the Debt Satisfaction Agreement are consummated; and (iv) the date on which the Amalgamation becomes effective as provided for in the letters patent of amalgamation issued by the Minister, which shall each be the same date (such date being the “Effective Date”).

If the necessary approvals, including the PWC Securityholder Approvals and the Required Regulatory Approvals are obtained, it is currently anticipated that the Transaction will be completed in the first quarter of calendar 2017.

Interests of Certain Persons in the Transaction

In considering the recommendation of the PWC Independent Committee and the PWC Board, PWC Securityholders should be aware that directors and executive officers of PWC may have interests in the Transaction or may receive benefits that differ from, or be in addition to, the interests of PWC Securityholders generally. Other than the interests and benefits described below, none of the directors or officers of PWC or, to the knowledge of the directors and executive officers of PWC, any of their respective associates or affiliates, has any material interest, direct or indirect, by way of beneficial ownership of securities or otherwise in any matter to be acted upon in connection with the Transaction or that would materially affect the Transaction.

Subject to the exchange of PWC DSU’s for PWC Common Shares as described above under “Particulars of the Transaction — The Transaction — PWC DSU Exchange”, all benefits received, or to be received, by directors, officers or employees of PWC as a result of the Transaction are, and will be, solely in connection with their services as directors, officers or employees of PWC. No benefit has been, or will be, conferred for the purpose of increasing the value of consideration payable to any such person for the PWC Securities held by such persons and no consideration is, or will be, conditional on the person supporting the Transaction.

Related Party Participation

Pursuant to MI 61-101, a “related party” of an entity includes (among others) persons holding over 10% of the voting rights attached to the voting securities of that entity, as well as the directors and senior officers of the entity and such person. 340268 holds more than 10% of the voting rights attached to the voting securities of PWC and is therefore a “related party” of PWC. Mr. Patrick George, a director of PWC, is also president of 340268. See “Particulars of the Transaction — Interests of Certain Persons in the Transaction - Consideration”. 340268 also has securityholdings in VersaBank.

All PWC Securities held by related parties of PWC will be treated identically and in the same manner in connection with the Transaction as PWC Securities held by any other PWC Securityholders. See “Particulars of the Transaction — Multilateral Instrument 61-101”.

Pursuant to the Debt Satisfaction Agreement, assuming that the Loan Facility made available to PWC by 340268 is fully drawn, PWC will issue to 340268 (or as it directs) up to 82,357,598 PWC Common Shares. See “Particulars of the Transaction — The Transaction — The Debt Satisfaction”.

Pursuant to the PWC Recapitalization, PWC will issue: (i) 33,041 PWC Common Shares to 340268 and an aggregate of 311,992 PWC Common Shares to Patrick George, his brother William George, and his spouse, Christine George in satisfaction of the PWC Class B Preferred Share Consideration; and (ii) 168,027,279 PWC Common Shares to 340268 and an aggregate of 65,899,492 PWC Common Shares to Patrick George, his brother William George, and his spouse, Christine George in satisfaction of the PWC Series C Note Consideration.

Common Directors on PWC Board and VersaBank Board

Mr. Paul Oliver and Mr. David Taylor are directors of each of PWC and VersaBank. Mr. Taylor is also an officer of each of PWC and VersaBank. Both Mr. Oliver and Mr. Taylor have securityholdings in each of PWC and VersaBank. As a result, Mr. Oliver and Mr. Taylor did not participate in the PWC Board’s approval of the Transaction and abstained from voting on the approval of the Transaction when such matter was put before the PWC Board. Messrs. Oliver and Taylor each disclosed such interests, and accordingly, the PWC Board was aware of these actual or potential conflicts of interest and considered them, among other matters, when they approved the Transaction.

Securities Ownership and the Intentions of Directors and Executive Officers

The following table sets out the names and positions of the directors and executive officers of PWC as of the Record Date, the number of PWC Common Shares, PWC Class A Preferred Shares, PWC Class B Preferred Shares, PWC Series C Notes, PWC DSUs, PWC Options, VersaBank Common Shares, VersaBank Series 1 Preferred Shares, VersaBank Series 3 Preferred Shares and VersaBank Options owned or over which control or direction was exercised by each such director or officer of PWC as of the Record Date and, where known after reasonable enquiry, by their respective associates or affiliates. To the knowledge of PWC, none of the directors and executive officers of PWC and, after reasonably enquiry, their respective associates of affiliates, hold any PWC 7.5% Notes.

Name

PWC
Common
Shares

PWC
Class B
Preferred
Shares

PWC
Series C
Notes

PWC
DSUs

PWC
Class A
Preferred
Shares

PWC
Options

VersaBank
Common
Shares

VersaBank
Series 1
Preferred
Shares

VersaBank
Series 3
Preferred
Shares

VersaBank
Options

Patrick M. George
Director

835,082
(1.87%)

682
(0.06%)

$5,368,000
(8.70%)

8,594
(5.35%)

5,000
(1.59%)

Nil

392,807
(1.95%)

300
(0.02%)

Nil

Christine George(1)
Associate of Patrick M. George

2,434,700
(5.46%)

500
(0.05%)

505,000
(0.82%)

Nil

15,814
(0.08%)

Nil

Estate of Eugene George
Associate of Patrick M. George and Significant Shareholder of PWC

6,900,000
(15.47%)

Nil

340268 Ontario Limited(2)(3)
Significant Shareholder of PWC

7,055,624
(15.82%)

217
(0.02%)

22,499,000
(36.47%)

Nil

1,948,468
(9.70%)

Nil

William George(4)
Associate of 340268

251,378
(0.56%)

867
(0.08%)

2,951,000
(4.78%)

Nil

653,724
(3.25%)

Nil

Tel Matrundola
Chairman and Director

228,128
(0.51%)

24,652
(2.25%)

Nil

6,500
(1.55%)

23,765
(0.12%)

100
(0.01%)

Nil

Kelly Barone(5)
Associate of Tel Matrundola

77,122
(0.17%)

3,153
(0.29%)

Nil

9,050
(0.05%)

100
(0.01%)

Nil

Paul G. Oliver
Director of PWC and VerasBank

30,248
(0.07%)

217
(0.02%)

$20,000
(0.03%)

55,054
(34.27%)

Nil

13,706
(0.07%)

1,000
(0.07%)

300
(0.02%)

Nil

J.S. (Steve) Wilson
Director

1,000
(< 0.01%)

Nil

Tony Dagnone
Director

251,000
(0.56%)

Nil

Name

PWC
Common
Shares

PWC
Class B
Preferred
Shares

PWC
Series C
Notes

PWC
DSUs

PWC
Class A
Preferred
Shares

PWC
Options

VersaBank
Common
Shares

VersaBank
Series 1
Preferred
Shares

VersaBank
Series 3
Preferred
Shares

VersaBank
Options

David R. Taylor
Director, President and Chief Executive Officer of PWC and VersaBank

2,210,141
(4.96%)

Nil

289,859
(69.23%)

338,400
(1.68%)

Nil

40,000
(100%)

Barry D. Walter
Senior Vice President and Chief Financial Officer of PWC and VersaBank

36,260
(0.08%)

Nil

9,200
(2.20%)

2,900
(0.01%)

100
(0.01%)

1,100
(0.07%)

Nil

Cameron Mitchell
Vice President, General Counsel & Corporate Secretary of PWC and VersaBank

Nil

Total

20,310,683
(45.55%)

30,288
(2.77%)

31,343,000
(50.81%)

63,648
(39.62%)

5,000
(1.59%)

305,559
(72.98%)

3,398,634
(16.91%)

1,600
(0.11%)

1,400
(0.08%)

40,000
(100%)

Notes:

(1) Christine George is an associate of Patrick George.

(2) Patrick George is president of 340268 and holds more than 10% of the outstanding voting securities of 340268.

(3) To the knowledge of PWC, after reasonably enquiry, the only shareholders of 340268 that hold securities of PWC are Patrick George and his sibling, William George.

(4) William George holds more than 10% of the outstanding voting securities of 340268.

(5) Kelly Barone is an associate of Tel Matrundola.

All of the directors and executive officers of PWC intend to vote their PWC Securities in favour of the PWC Series C Noteholders Resolution, the PWC Common Shareholders Resolution and the PWC Class B Preferred Shareholders Resolution and their VersaBank Shares in favour of the Amalgamation Resolution. All PWC Securities held by such directors and executive officers of PWC will be treated identically and in the same manner under the Redemptions, the PWC Recapitalization and the Amalgamation as PWC Securities held by any other PWC Securityholders. All VersaBank Shares held by such directors and executive officers of PWC will be treated identically and in the same manner under the Amalgamation as VersaBank Shares held by any other VersaBank Shareholders.

The following table sets out the names and positions of the directors and executive officers of VersaBank as of the Record Date, the number of PWC Common Shares, PWC Class A Preferred Shares, PWC Class B Preferred Shares, PWC Series C Notes, PWC DSUs, PWC Options, VersaBank Common Shares, VersaBank Series 1 Preferred Shares, VersaBank Series 3 Preferred Shares and VersaBank Options owned or over which control or direction was exercised by each such director or officer of VersaBank as of the Record Date and, where known after reasonable enquiry, by their respective associates or affiliates. To the knowledge of PWC, none of the directors and executive officers of VersaBank and, after reasonably enquiry, their respective associates or affiliates, hold any PWC 7.5% Notes.

Name(1)

PWC
Common
Shares

PWC
Class B
Preferred
Shares

PWC
Series C
Notes

PWC
DSUs

PWC
Class A
Preferred
Shares

PWC
Options

VersaBank
Common
Shares

VersaBank
Series 1
Preferred
Shares

VersaBank
Series 3
Preferred
Shares

VersaBank
Options

The Honourable Thomas A. Hockin
Chairman and Director

20,500
(0.05%)

Nil

8,100
(0.04%)

3,500
(0.24%)

1,000
(0.06%)

Nil

Robbert-Jan Brabander
Director

89,300
(0.20%)

Nil

41,858
(26.05%)

Nil

18,590
(0.09%)

250
(0.02%)

100
(0.01%)

Nil

Name(1)

PWC
Common
Shares

PWC
Class B
Preferred
Shares

PWC
Series C
Notes

PWC
DSUs

PWC
Class A
Preferred
Shares

PWC
Options

VersaBank
Common
Shares

VersaBank
Series 1
Preferred
Shares

VersaBank
Series 3
Preferred
Shares

VersaBank
Options

David A. Bratton
Director

41,919
(0.09%)

Nil

16,998
(0.08%)

500
(0.03%)

Nil

R.W. (Dick) Carter
Director

Nil

6,000
(0.03%)

Nil

Arnold E. Hillier
Director

68,852
(0.15%)

581
(0.05%)

253,000
(0.41%)

Nil

29,889
(0.15%)

1,500
(0.10%)

1,000
(0.06%)

Nil

Colin E. Litton
Director

21,136
(0.05%)

174
(0.02%)

Nil

24,503
(0.12%)

500
(0.03%)

Nil

Susan T. McGovern
Director

Nil

10,397
(0.05%)

Nil

Avery Pennarun
Director

1,915
(< 0.01%)

Nil

Shawn Clarke
Senior Vice-President and Chief Operating Officer

34
(< 0.01%)

Nil

200
(< 0.01%)

100
(0.01%)

Nil

Christy Alycia Cunningham(2)
Associate of Shawn Clarke

1,593
(< 0.01%)

Nil

Ross P. Duggan
Senior Vice-President, Lending

31,800
(0.07%)

Nil

6,500
(1.55%)

500
(< 0.01%)

100
(0.01%)

200
(0.01%)

Nil

Nick Kristo
Credit and Chief Risk Officer

Nil

6,500
(1.55%)

500
(< 0.01%)

200
(0.01%)

Nil

Jonathan F.P. Taylor
Senior Vice-President, Deposit Services & Human Resources

66,910
(0.15%)

2,000
(0.18%)

16,000
(0.03%)

Nil

9,200
(2.20%)

498
(< 0.01%)

200
(0.01%)

100
(0.01%)

Nil

Jean-Paul Beker
Vice-President, Real Estate Lending

Nil

3,140
(0.02%)

Nil

Brian A. Conley
Vice-President, Credit

12,950
(0.03%)

Nil

8,500
(2.03%)

Nil

Michael Dixon
Vice-President, Consumer Lending

1,645
(< 0.01%)

Nil

4,400
(1.05%)

200
(< 0.01%)

900
(0.06%)

100
(0.01%)

Nil

Stephanie Francis
Vice-President, Finance & Accounting

Nil

4,200
(1.00%)

Nil

500
(0.03%)

200
(0.01%)

Nil

Joanne Johnston
Chief Internal Auditor

Nil

2,000
(0.48%)

Nil

Aly Lalani
Vice-President, Treasurer

663
(< 0.01%)

22
(< 0.01%)

Nil

1,768
(0.01%)

200
(0.01%)

100
(0.01%)

Nil

Kerry McDowell
Vice-President, Credit Card Services

Nil

100
(0.01%)

Nil

Scott A. Mizzen
Vice-President, Real Estate Finance

1,084
(< 0.01%)

65
(0.01%)

Nil

4,400
(1.05%)

1,005
(0.01%)

Nil

Andy Min
Vice-President, Finance & Corporate Accounting

Nil

Name(1)

PWC
Common
Shares

PWC
Class B
Preferred
Shares

PWC
Series C
Notes

PWC
DSUs

PWC
Class A
Preferred
Shares

PWC
Options

VersaBank
Common
Shares

VersaBank
Series 1
Preferred
Shares

VersaBank
Series 3
Preferred
Shares

VersaBank
Options

Jason Patterson
Vice-President, Investment Risk & Control

4,000
(0.01%)

Nil

David Thoms
Vice-President, Structured & Corporate Finance

300
(< 0.01%)

Nil

4,400
(1.05%)

Nil

100
(0.01%)

Nil

Steve Creery
Vice-President, Credit

2,100
(< 0.01%)

Nil

4,400
(1.05%)

Nil

200
(0.01%)

Nil

Total

366,701
(0.82%)

2,842
(0.26%)

269,000
(0.44%)

41,858
(26.05%)

Nil

54,500
(13.02%)

122,288
(0.61%)

8,850
(0.61%)

3,400
(0.20%)

Nil

Notes:

(1) Excludes security holdings of Messrs. Oliver, Taylor, Walter and Mitchell whose security holdings have been reported in the table that discloses the security holdings of the PWC directors and executive officers.

(2) Christy Alycia Cunningham is an associate of Shawn Clarke.

PWC DSUs

As of the Record Date, the directors and executive officers of PWC held 63,648 PWC DSUs, which represented approximately 0.14% of the issued and outstanding PWC Common Shares. Pursuant to the Pre-Amalgamation Agreement, PWC intends to enter into PWC DSU Exchange Agreements with each holder of PWC DSUs pursuant to which each holder of PWC DSUs will agree to exchange each issued and outstanding PWC DSU for one (1) PWC Common Share immediately prior to the Effective Time. If the Transaction is consummated, the directors and executive officers of PWC would be entitled to collectively receive 63,648 PWC Common Shares, in the aggregate, which PWC Common Shares will not be entitled to a vote at the PWC Common Shareholders Meeting.

PWC Stock Options

As of the Record Date, the directors and executive officers of PWC held, in the aggregate, 305,559 PWC Options, all of which were vested and exercisable as of that date. The outstanding PWC Options held by such directors and executive officers had exercise prices ranging from $1.26 to $11.70. If the Amalgamation is consummated, such directors and executive officers would be entitled to collectively receive 5,605 PWC Replacement Options, in the aggregate, as all PWC Options outstanding immediately prior to the Effective Time (whether vested or unvested) shall, be converted into an option to purchase (1/54.508758) Bank Common Shares. The exercise price per Bank Common Shares subject to such PWC Replacement Options shall be an amount equal to the quotient obtained when (A) the exercise price per PWC Common Share subject to such PWC Option immediately before the Effective Time, is divided by (B) (1/54.508758), provided that the aggregate exercise price payable on any particular exercise of PWC Replacement Options shall be rounded up to the nearest whole cent.

Directors and Officers of the Bank following the Transaction

The Amalgamation Agreement provides that Mr. Paul Oliver and Mr. David Taylor will each serve as directors of the Bank following the Transaction. See “Schedule C — Information Concerning the Bank after the Transaction — Directors and Officers” in the Joint Disclosure Booklet

Indemnity and Insurance Arrangements

For a summary of the indemnification and insurance arrangements for directors and executive officers of PWC under the Amalgamation Agreement, see “Schedule D — Summary of the Pre-Amalgamation Agreement and Amalgamation Agreement — Amalgamation Agreement — Indemnification and Insurance” in the Joint Disclosure Booklet. Additionally, please refer to Section 6 of the Amalgamation Agreement - “Indemnification of Directors and Officers and Insurance”. The Amalgamation Agreement can be found on SEDAR under VersaBank’s and PWC’s profiles.

Consideration

The following table sets out the names and positions of the directors and executive officers of PWC as of the Record Date including, where known after reasonable enquiry, their respective associates or affiliates and the consideration to be received by such persons pursuant to the Transaction.

Name

Estimated
cash
payment to
be received
in respect of
the
redemption
of PWC
Class A
Preferred
Shares(1)

Total estimated
amount of PWC
Common Shares
to be received in
connection with
the PWC
Recapitalization
and the PWC
DSU Exchange
Agreements

Total estimated
amount of Bank
Common Shares
to be received
pursuant to the
Amalgamation in
respect of PWC
Common Shares
held immediately
prior to the
Amalgamation

Estimated
amount of PWC
Replacement
Options to be
received in
respect of PWC
Options
pursuant to the
Amalgamation

Estimated
amount of
options to
purchase Bank
Common
Shares to be
received in
respect of
VersaBank
Options
pursuant to the
Amalgamation

Total estimated
Bank Common
Shares held
after the
Amalgamation (2)

Total estimated
Bank Series 1
Preferred
Shares held
after the
Amalgamation

Total estimated
Bank Series 3
Preferred
Shares held
after the
Amalgamation

Patrick M. George
Director

$16,136.30

40,201,795

752,849

Nil

1,145,656
(5.37%)

300
(0.02%)

Nil

Christine George
Associate of Patrick M. George

Nil

3,847,579

115,252

Nil

131,066
(0.61%)

Nil

Estate of Eugene George
Associate of Patrick M. George and Significant Shareholder of PWC

Nil

126,585

Nil

126,585
(0.59%)

Nil

340268 Ontario Limited
Significant Shareholder of PWC

Nil

168,060,320

4,723,526(3)

Nil

6,671,994
(31.30%)

Nil

William George
Associate of 340268

Nil

22,170,704

411,348

Nil

1,065,072
(5.00%)

Nil

Tel Matrundola
Chairman and Director

Nil

3,753,661

73,048

119

Nil

96,813
(0.45%)

100
(0.01%)

Nil

Kelly Barone
Associate of Tel Matrundola

Nil

480,094

10,222

Nil

19,272
(0.09%)

100
(0.01%)

Nil

Paul G. Oliver
Director of PWC and VerasBank

Nil

237,459

4,911

Nil

18,617
(0.09%)